The Polish oil company ORLEN has concluded contracts for 16 additional cargoes of oil for its refineries in Poland, Czechia and Lithuania. Among the suppliers were Kazakhstan, Norway, the United Kingdom, Algeria, Azerbaijan, as well as countries of North and South America.
WHAT SUPPLIES ORLEN CONCLUDED
According to Reuters, ORLEN acquired 16 additional cargoes of oil amid disruptions to supplies from Saudi Arabia.
The company concluded contracts for supplies from Norway, the United Kingdom, Algeria, Kazakhstan, Azerbaijan, as well as countries of North and South America. At the same time, ORLEN did not disclose the volumes for each destination and did not report the cost of the purchases.
WHY ORLEN EXPANDED ITS PURCHASES
The additional volumes were needed amid disruptions to supplies from Saudi Arabia. On 10 September, after one of the attacks, the East-West Pipeline was taken out of operation.
The state oil company Saudi Aramco has remained the largest supplier of oil to ORLEN since 2022 and provides about 40% of its volumes. The company warned European clients that part of the supplies planned for the end of September would be cancelled.
WHAT ORLEN AND THE POLISH GOVERNMENT SAID
As reported by TVN24, ORLEN stated that oil supplies to the Polish and other refineries of the group are continuing and fully cover their current needs.
Poland's Minister of State Assets Wojciech Balczun stated that the situation on the market remains "super-serious". According to him, the country's reserves are unaffected, however ensuring supplies depends on the ability to maintain current volumes and find alternative suppliers.
WHAT OTHER PURCHASES ORLEN IS MAKING
In addition to the contracts already concluded, on 16 September ORLEN held two more tenders for the purchase of oil. One provided for supplies of grades from the North Sea, the other — oil from Brazil or Guyana.
The additional purchases are related to meeting the needs of refineries in September and October. According to traders, disruptions to supplies from Saudi Arabia may persist until November.
The company covers part of its needs under a contract with the Norwegian Equinor, concluded in August. This agreement is designed for approximately 25% of ORLEN's supply needs.
WHAT THIS MEANS FOR KAZAKHSTAN
For Kazakhstan, this could mean an expansion of opportunities for oil supplies to the European market and an increase in the significance of alternative European sales destinations. Especially against the backdrop of ORLEN striving to diversify its sources of raw materials and having already concluded additional agreements with other suppliers, including the Norwegian Equinor.
At the same time, it is too early to speak of a long-term increase in exports of Kazakh oil to Europe. The situation on the market remains dynamic, and Saudi Arabia is already taking measures to restore supplies via alternative routes.
Thus, for Kazakhstan the main effect now is the emergence of an additional window of demand for Kazakh oil on the part of European refiners.
The only question is whether Kazakhstan will be able to take advantage of the opening opportunities and turn the current additional demand into a more sustainable presence of its oil on the European market.
