Saudi Arabia's oil-supply disruption has moved beyond concerns about pipeline capacity, with some crude cargoes destined for Europe being cancelled following disruption to the East-West pipeline and Yanbu loading operations.
European refiners have sought alternative supplies as uncertainty continues over the duration of the disruption.
Brent crude settled on September 15 at US$108.75 per barrel, while US West Texas Intermediate settled at US$105.83.
The physical-market disruption is important because it demonstrates that the infrastructure problem is affecting scheduled crude movements rather than merely influencing futures-market expectations.
However, the duration of the disruption remains uncertain.
Subsequent market movements may also change rapidly as traders respond to repair expectations, inventories and developments elsewhere in global oil supply.
Sri Lanka context
Do not state or imply that the disruption automatically produces an immediate change in Sri Lankan retail fuel prices.
International crude-price movements are only one input into domestic pricing.
Global oil prices rose again on September 14, with Brent crude moving back above US$108 per barrel during trading as Middle East shipping disruption intensified concern about supplies.
Attacks and disruption continue to affect Gulf shipping, while Saudi Arabia's strategically important East-West oil pipeline remains temporarily closed.
Reuters reported that the pipeline had been carrying approximately 4–5 million barrels per day before the disruption. Pressure on alternative shipping routes is also adding transportation time, tanker costs and fuel costs.
Sri Lanka position
These developments do not by themselves establish an immediate Sri Lankan pump-price increase, a domestic fuel shortage or disruption to local supplies. CPC's latest stated position was that no immediate domestic increase had been announced and sufficient stocks were reported at that time.