Oil shipments to Europe exceed $130 per barrel amid disruption of Saudi supplies

Spot prices for some oil cargoes in Europe jumped above $130 per barrel on Tuesday, approaching record levels seen in April, as buyers rushed to find alternatives to Middle Eastern supplies facing growing disruptions amid the escalating conflict in the region.

Compounding the war-related disruptions, trading sources said Saudi Arabia canceled shipments scheduled for late September destined for European buyers after an attack on the East-West pipeline last week forced it to halt loading operations at its main Red Sea port of Yanbu.

Data from the London Futures Exchange group indicated that buyers were raising bids on Tuesday for potential alternatives, such as North Sea oil. The price of Forties crude from the North Sea surged to $136.75 per barrel, nearing its all-time high of $147.37, recorded on April 13 shortly after Middle Eastern exports were disrupted by the Iran war.

Futures prices for oil rose by more than $3 on Tuesday, with Brent crude futures approaching $110 per barrel, following the suspension of Saudi shipments and after Libya halted operations at three oil fields, heightening concerns that disruptions to supply routes could persist for weeks.

Spot cargo prices tend to be higher than futures prices for crude oil benchmarks like Brent, largely because spot cargoes are delivered within a few weeks, ahead of oil traded in futures markets. The nearest Brent futures contract matures in November.