Nigerian crude is catching a bid as Saudi Arabia’s oil supply troubles ripple through European refining hubs, with traders and refiners scouting West African barrels to plug gaps left by a stricken pipeline half a world away.
Saudi Arabia has told some European customers that crude cargoes scheduled to load in the final days of September could be cancelled or delayed, according to trading and shipping sources, after drone attacks forced the kingdom to shut its 7 million-barrel-a-day East-West pipelines on September 11.
The pipeline, which carries crude roughly 1,200 kilometers from eastern oil fields to the Red Sea port of Yanbu, had been one of Riyadh’s main workarounds for avoiding the Strait of Hormuz, itself under strain from the broader confrontation between the U.S. and Iran.
Saudi Arabia has blamed the attacks on Iraqi militia; Yemen’s Houthi movement has claimed responsibility for related strikes on Saudi facilities in recent days.
Saudi Aramco has declined to comment on the reported cancellations.
“This is exactly the kind of dislocation that sends buyers hunting outside their usual supply book,” said one London-based crude trader who handles term contracts for a European refiner. “Nobody wants to be the plant that runs dry because they waited for Yanbu to reopen.”
Brent crude climbed as much as 3.7 percent to above $105 a barrel, while physical cargoes in Europe traded considerably richer, dated Brent around $122 and North Sea Forties as high as $136.75, according to traders.
Experts said that kind of premium is exactly the signal that tends to pull Nigerian grades into the conversation.
Bonny Light, Nigeria’s benchmark light sweet export stream, traded above $115 a barrel over the weekend, tracking the broader move in dated-Brent-linked benchmarks.
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“Nigerian grades carry a natural advantage right now because the barrels never touch the Red Sea or Hormuz to begin with,” said an energy analyst with a Lagos-based consultancy who tracks West African crude flows. “When Gulf routes get risky, the freight and insurance calculus shifts in favour of anything that loads in the Atlantic Basin.”
That combination, quality plus a shipping route untouched by the Gulf’s security problems, is what refiners are chasing. Poland’s Orlen, which sources roughly 40 percent of its crude from Aramco and has been named among buyers facing delayed or cancelled September cargoes, has begun lining up alternatives, seeking offers of North Sea grades such as Grane, Johan Sverdrup and Johan Castberg alongside U.S. WTI Midland and Kazakhstan’s CPC Blend, traders said.
Orlen declined to comment on details of specific commercial transactions, but said it actively manages its supply portfolio to ensure the uninterrupted operation of its refining assets.
“Adjusting and optimising purchase volumes is a standard, ongoing part of the Orlen Group’s operations, driven by both current production needs and changing market conditions,” an Orlen spokesperson told Reuters.
Refiners elsewhere in Europe are working the same problem. Spot demand for West African grades, including Bonny Light and Angola’s Cabinda, has picked up for prompt loading, and several refiners in Spain and Italy have secured emergency spot cargoes at premiums well above budget, according to traders tracking the flows, rather than cut crude runs.
“Southern European plants that lean heavily on Red Sea-routed Middle Eastern supply are the most exposed,” one Mediterranean-based crude broker said. “They’re the ones calling around for anything light and sweet that can get to a Med port quickly.”
Nigeria is producing into that demand from a reasonably firm base. Total crude and condensate output averaged around 1.68 million barrels a day in August, with a crude-only baseline closer to 1.5 million to 1.57 million barrels, according to data from the Nigerian Upstream Petroleum Regulatory Commission and OPEC figures, the fourth straight month the country has run roughly in line with its OPEC quota.
Bonny terminal remains the largest single stream, loading around 320,000 barrels a day, followed by Forcados at roughly 317,000, Qua Iboe near 171,000, Escravos around 131,000 and Bonga close to 92,500.
“Higher prices are welcome, but this isn’t a production story for Nigeria yet, it’s a pricing story,” the Lagos-based analyst said. “The barrels we have are getting a better bid. Whether that turns into meaningfully higher volumes depends on how long Saudi Arabia’s export routes stay compromised.”
Market sources cited by Argus estimated Yanbu held only about five days of crude inventory when loadings there stopped, and some cargoes originally due to load in late September were said to be at risk of slipping as far as November.
No Saudi crude had left Yanbu since September 11, according to shipping-tracking data. Aramco had told at least three European refiners in August that it would meet full contractual volumes for September via alternative routes, Egypt’s Sidi Kerir terminal and ship-to-ship transfers off Malta , but at least four scheduled tanker shipments from Sidi Kerir to Gdansk reportedly failed to materialise, a sign that even the workarounds are straining.
The International Energy Agency has flagged how thin the cushion has become. Gulf oil exports were running near half their pre-war level in August, the agency said, with crude losses narrowing only slightly to just below 45 percent even as some flows found paths around Hormuz. Refined product exports from the Gulf remain down nearly 60 percent, and diesel prices in the U.S. have more than doubled since before the conflict began, a gap that has pushed Atlantic Basin refining margins to records.
For Nigeria, freight costs and prompt-market liquidity still cap how much of that demand can be absorbed quickly. “Nigerian cargoes are sold well in advance in a normal market, so there’s a limit to how much prompt barrel availability actually exists,” the London trader cautioned. “What you’re seeing is repricing more than a flood of new volume.”
