As a consequence of the geopolitical conflict in the Middle East, Polish energy company Orlen has launched spot tenders to acquire alternative crude and prevent supply shortages at its refineries in Poland, Lithuania, and the Czech Republic. In this regard, the company has focused its purchase orders on varieties from the North Sea, such as Johan Sverdrup, Grane, and Johan Castberg.
Urgent Supply Reorganization in Eastern Europe
The industrial group has extended its commercial requests to other regions to diversify its raw material basket. For this reason, the firm seeks to acquire cargoes of the US blend WTI Midland and Kazakh crude CPC.
Indeed, the interruption of Saudi flow represents a critical setback for Central Europe’s energy infrastructure. According to maritime tracking data, the Polish port of Gdansk and the Lithuanian terminal of Butinge processed approximately 59% of total European Saudi oil imports this year, with daily averages of 160,000 and 63,000 barrels, respectively.
However, recent militia attacks against infrastructure in Saudi Arabia have paralyzed essential logistics routes, including the East-West pipeline. As a direct result, at least four tanker charters scheduled between the Sidi Kerir terminal and Gdansk were canceled during the first half of September.
The Vulnerability of the Saudi Oil Supply Network
This situation highlights the challenges of the operational transition initiated by Orlen after reducing its historical dependence on Russian oil. In this regard, Saudi Aramco had consolidated its position as the Polish group’s largest supplier, covering approximately 40% of its processing needs.
Likewise, the company has sought to strengthen alliances with other global players to cushion geopolitical volatility. Therefore, the agreement recently signed with Norway’s Equinor will guarantee up to 25% of the corporation’s refining capacity.
Finally, Orlen’s management has clarified that refining at its facilities operates within normal margins. Consequently, executives maintain that the active purchase of spot cargoes is part of routine optimization operations to ensure regional energy security.
Source and photo: Orlen
