Oil prices settled more than $3 higher on Friday after a disruption at the Yanbu terminal on Saudi Arabia's Red Sea coast prompted the cancellation of crude cargoes, according to a Reuters report.

The settlement marks one of the sharpest single-session gains of the quarter for both benchmarks, driven by an operational outage rather than any shift in supply-demand fundamentals. Yanbu, on Saudi Arabia's western coast, serves as the loading point for the East-West pipeline, which carries crude from fields in the Eastern Province across the kingdom to Red Sea export terminals — bypassing the Strait of Hormuz entirely.

Traders told Reuters that Saudi Aramco cancelled several crude cargo loadings scheduled at Yanbu following the disruption. The company has not yet publicly detailed the cause of the outage, the number of cancelled cargoes, or the expected duration of the interruption, according to the report.

The news lifted both benchmarks sharply. Market participants moved quickly to price the risk that a prolonged halt at the terminal could remove several hundred thousand barrels per day of export capacity from the market, depending on how long loadings remain suspended. Yanbu is a critical node for West-bound Saudi crude shipments to Europe and the Americas.

Until Aramco issues an operational update, the actual volume impact remains unquantified. Cargo cancellations reported so far suggest an interruption measured in days rather than weeks, but that assessment rests on trader commentary rather than company guidance.

The outage puts a fresh premium on Red Sea logistics at a time when regional shipping already carries elevated risk. Any extended disruption at Yanbu would force Aramco either to reroute affected volumes through Gulf terminals — adding tanker transit around the Arabian Peninsula — or to draw down storage at the terminal while repairs proceed.

For refiners in Europe and on the US Atlantic Coast that run Saudi crude, the immediate question is allocation. If cancellations extend into subsequent loading programs, buyers will need to seek replacement barrels in the Mediterranean and North Sea spot markets, where medium-sour grades comparable to Saudi export slates trade at a premium to futures.

Price commentary in this session should be read as reaction to a specific operational event, not a repricing of the balance. OPEC+ spare capacity remains substantial, and Saudi output from the Gulf coast — the bulk of the kingdom's production — is unaffected by a Red Sea terminal outage. Physical differentials, not futures, will signal whether the market treats the disruption as transient.

The next signposts are operational, not macro. Watch for an Aramco statement on the cause and expected restart timeline at Yanbu, confirmation of how many cargoes the company will reschedule versus cancel outright, and any impact on the April loading program. The futures curve's prompt spread — already responsive to this session's move — will indicate whether traders expect the outage to tighten near-term supply or fade without lasting effect.