Saudi Arabia is offering more crude oil shipments to Asian buyers through maritime transfer at the Port of Sohar. This decision follows damage caused by drone attacks on the country's key oil pipelines leading to the Red Sea.
Details of Crude Oil Supply
The Saudi state oil company, Aramco, has supplied Arab Light, Arab Medium, and Arab Heavy crude oil to buyers in Asia for loading at Sohar, which is located outside the Strait of Hormuz. These offers reflect Aramco's strategic shift towards loading more crude oil from the Persian Gulf for transfer to other locations.
In recent weeks, Aramco has made at least two similar offers of Arab Medium and Arab Heavy to Asian buyers. Additionally, over the past week, Saudi Arabia has doubled its daily crude oil shipments at the Ras Tanura and Juaymah terminals in the Persian Gulf to about two very large crude carriers equivalent to 4 million barrels.
Consequences of Attacks and Changes in Loading
Satellite tracking data indicates that four very large crude carriers loaded on Wednesday from Ras Tanura, with a total capacity of 8 million barrels. The increase in loadings and the volume of Aramco's offers comes as other Gulf producers are also offering more shipments for loading outside the Strait of Hormuz.
Saudi Arabia, as the world's largest oil exporter, is heavily reliant on its East-West pipeline to transport crude oil to the port of Yanbu on the Red Sea. This dependency has increased since the Iran-Iraq War, which severely restricted transportation through the Strait of Hormuz. Saudi Arabia closed this pipeline on Friday due to damage from drone attacks, which has led to a rise in global oil prices to their highest levels in months.
At least one Asian buyer that had planned shipments for loading this month has reported receiving a notice from Aramco that shipments from Yanbu will be delayed, with no new loading date specified. Additionally, Saudi Arabia has informed European customers that some oil shipments scheduled for September will be canceled.
