Poland's Orlen buys 16 extra crude cargoes to cover Saudi disruption
SEATTLE (Oil Monster): Poland's Orlen said on Wednesday it had bought 16 extra cargoes of oil for its Polish, Lithuanian and Czech refineries, after traders said it was rushing to secure crude to cover disruptions to Saudi supplies until November.
In a statement, Orlen said it had contracted the deliveries from Norway, Great Britain, Algeria, Kazakhstan, Azerbaijan and the Americas. It did not indicate how much it had paid.
Saudi Arabia's oil industry is grappling with the impact of a wave of attacks by Iran-aligned militia, including one which took its East-West Pipeline offline on September 10.
State-owned Aramco, which has been Orlen's largest oil supplier since 2022, providing around 40% of its volumes, has informed European customers some late-September cargoes will be cancelled.
Orlen typically imports 700,000-barrel cargoes, according to Kpler data. With current physical oil prices nearing $130 per barrel, the total cost of the additional cargoes could be close to $1.5 billion, Reuters calculations show.
Reuters could not confirm the exact payment structure of the tenders nor the differential to physical benchmark dated Brent that Orlen would have paid for the cargoes.
TWO FURTHER TENDERS
Saudi Arabia has not said when its East-West Pipeline will re-open and market sources said Orlen is buying to cover demand for September and October.
Orlen issued two further tenders to buy crude oil on Wednesday, seeking North Sea grades in one and Brazilian or Guyanese crude in the other, two physical oil traders said. Results were slow to surface.
Orlen has in recent years weaned itself off Russian oil, which made up most of its crude intake around a decade ago.
Last month, it signed a deal with Norway's Equinor (EQNR.OL) for Sverdrup crude to cover 25% of its supply needs.
"The remaining part of the demand is covered, among others, on the basis of a contract concluded in August with Norway's Equinor," said Orlen, adding that it monitors the raw materials market situation and has a diversified supplier portfolio.
"Crude oil supplies to Polish and other ORLEN Group refineries are carried out on an ongoing basis and fully cover their demand," it said.
Courtesy: www.reuters.com