Saudi Arabia Offers More Crude via Oman After Pipeline Attacks
SINGAPORE — WEB DESK: Saudi Arabia is offering additional crude oil to Asian refiners through ship-to-ship transfers off Oman’s Sohar port, as the world’s largest oil exporter seeks alternative ways to maintain supplies after drone attacks damaged its critical East-West pipeline to the Red Sea.
State oil company Saudi Aramco has offered its flagship Arab Light, along with Arab Medium and Arab Heavy, to term customers in Asia for loading off Sohar, people familiar with the arrangements told Reuters.
Sohar is located outside the Strait of Hormuz, allowing transferred cargoes to continue their journeys without requiring receiving tankers to enter the heavily disrupted waterway.
The latest offers indicate that Aramco is moving larger volumes of crude out of the Gulf before transferring them to customers outside Hormuz. Reuters reported that the company had made at least two similar offers of Arab Medium and Arab Heavy crude to Asian customers in recent weeks.
Saudi Aramco declined to comment on the arrangements.
Saudi Loadings Inside Gulf Double
Saudi Arabia has simultaneously increased crude loadings from terminals inside the Gulf.
Daily loadings at the kingdom’s Ras Tanura and Juaymah terminals have doubled over the past week to the equivalent of about 4 million barrels per day, according to satellite tracking by consultancy Energy Aspects cited by Reuters.
Separate Kpler vessel-tracking data showed four very large crude carriers, or VLCCs, loading at Ras Tanura on Wednesday. Together, those vessels have capacity for around 8 million barrels of crude.
A VLCC can typically carry roughly 2 million barrels.
The strategy effectively involves loading more crude inside the Gulf and moving it through Hormuz before transferring supplies outside the strait for onward delivery.
Other Gulf producers have also been offering more crude for loading outside Hormuz after securing vessels to shuttle supplies through the waterway, according to Reuters.
Pipeline Attack Disrupts Yanbu Route
Saudi Arabia’s logistical shift follows the shutdown of its strategically important East-West pipeline, which transports crude from the kingdom’s eastern oil-producing regions across the country to the Red Sea.
The pipeline had become particularly important because it allows Saudi crude to reach Yanbu without passing through the Strait of Hormuz.
Saudi Arabia shut the pipeline on Friday after it was damaged in drone attacks, and crude loadings at Yanbu have subsequently been suspended. The disruption contributed to global oil benchmarks reaching multi-month highs this week.
The East-West pipeline had been carrying roughly 4 million to 5 million barrels per day, making the route a major component of Saudi Arabia’s strategy for bypassing disruptions in Hormuz.
The latest developments therefore expose the vulnerability of both maritime and overland alternatives when regional energy infrastructure comes under pressure.
Asian Cargoes Delayed
The pipeline shutdown is already affecting customers.
At least one Asian buyer with cargoes scheduled for loading this month received notification from Aramco that its Yanbu shipments would be delayed and rescheduled. The notice did not specify how long the delay would last.
European customers face a more direct disruption.
Saudi Arabia has informed European buyers that some September-loading crude cargoes will be cancelled, according to trading and shipping sources.
The distinction is important: available reporting confirms cancellations of some cargoes, not a complete suspension of Saudi crude exports to Europe.
Hormuz Disruption Reshapes Oil Trade
The Strait of Hormuz remains one of the most important energy chokepoints in the world, and prolonged disruption to vessel traffic has forced Gulf exporters and international refiners to devise increasingly complex supply arrangements.
Saudi Arabia had already resumed some crude loading from terminals inside Hormuz in August, including Ras Tanura, while offering prompt Arab Medium and Arab Heavy cargoes.
The latest Sohar arrangement extends that strategy by using Oman as a transfer point.
Oil markets remain sensitive to the disruption. Brent crude has stayed above $100 per barrel in recent sessions, although prices eased on Wednesday after preliminary US data showed an unexpected increase in American crude inventories.
For Asian refiners, Saudi Arabia’s expanded Oman loading programme could provide another mechanism for maintaining access to Saudi crude while regional shipping routes remain constrained.
However, the durability of the arrangement will depend on tanker availability, security conditions around Hormuz and the speed at which Saudi Arabia can restore normal operations through its East-West pipeline and Yanbu export terminal.
