Hopes earlier this week that Saudi Arabia could restore roughly half the capacity of its East-West pipeline and resume crude loadings for Europe faded by the end of the week. The pipeline bypasses the Strait of Hormuz and carries crude to a Red Sea export terminal, making its recovery critical to restoring disrupted shipments to the energy-stricken continent.
Bloomberg reports that Saudi Aramco told at least two European refiners they would receive no crude deliveries next month, with the decision reportedly extending to all European buyers.
The suspension would force refiners to secure replacement barrels elsewhere and bid up crude in international markets, potentially raising feedstock costs and adding pressure to Europe's petroleum products market ahead of the Northern Hemisphere winter, when already tight diesel and natural gas supplies leave limited room for further disruptions.
OECD countries in Europe imported 577,000 barrels a day of Saudi crude in June, according to the latest data from the International Energy Agency. That figure illustrates the scale of the disruption.
Some European buyers are already panicking and rushing to cover the shortfall. Poland's Orlen has issued more than 10 tenders this week seeking alternative supplies, highlighting the urgency of replacing contracted Saudi barrels before winter arrives.
The East-West pipeline shutdown following a drone attack earlier this month has dealt a major blow to an oil market that had already seen Brent crude futures exceed $100 a barrel.
Saudi Arabia had operated the 7 million-barrel-a-day route at full capacity since the start of the US-Iran conflict, as Iranian attacks on shipping brought traffic through the Strait of Hormuz to a near standstill. Those attacks have continued to this week.
The chaos in the Middle East prompted JPM's head of commodities, Natasha Kaneva, to write a wild note to clients on Thursday, warning:
"For the first time since the start of the Iran conflict, we don't have a baseline view. We simply don't know how to model the endgame."
Brent crude trades around $103 a barrel on Friday morning, while WTI trades at $101.
The US diesel crack spread trades around $112 as the global refining crisis raises the risk of "echoes of the 2008 gasoline shock," as recently explained by Bloomberg Intelligence senior commodity strategist Mike McGlone.
Midwest Braces For Diesel Crisis After Exxon's Joliet Refinery Suffers Disruption
A major refinery in the US Midwest went offline this week after a power outage, adding to global refining disruptions as US diesel prices reach record highs.
One of the largest diesel refineries in the Midwest is offline pic.twitter.com/JSwuHrNfBw
— zerohedge (@zerohedge) September 18, 2026
Exxon Mobil shut its 275,000-barrel-a-day Joliet refinery in Illinois on Sunday after a power failure triggered the facility's safety flare, Reuters reported. A Thursday filing also disclosed that floodwater had overwhelmed a pump at the plant.
Exxon traced the power outage to ComEd's primary and secondary lines supplying the refinery and said it had fully restored electricity by Thursday. Power restoration, however, does not mean fuel production has resumed.
Located about 40 miles southwest of Chicago, Joliet can produce about 11 million gallons of gasoline and diesel daily, primarily for Midwest consumers. Its processing capacity represents roughly 6% of Midwest refining capacity and 1.5% nationally.
UPDATE: $XOM Joliet reported to have suffered a "total power outage". this refinery capacity is 275kbpd, a large facility and it looks bad. https://t.co/IdAgfWhhUz pic.twitter.com/Sb52uXIviK
— Patrick De Haan (@GasBuddyGuy) September 14, 2026
A prolonged shutdown would tighten regional fuel availability and risk further price increases across Illinois, Indiana, Ohio, Wisconsin, and Michigan.
"There's an additional likelihood of further price increases in the Great Lakes. Gas: OH is at *high* risk of largest jump, WI, IN are at *med* risk of moderate jump, MI, IL at low/med risk but could go past $5/gal. diesel: will likely jump in most these areas mod/large jump," Patrick De Haan, head of petroleum analysis at GasBuddy, wrote on X.
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