Saudi Arabia — Saudi Arabia is boosting crude shipments from its Gulf export facilities as it seeks alternatives to disruptions affecting its Red Sea oil infrastructure.
Trade sources said Saudi Arabia has sold approximately 60 million barrels of crude from Ras Tanura, its Gulf export port inside the Strait of Hormuz, for September and October loading through ship-to-ship transfers at Oman’s Sohar port.
The additional cargoes have raised Saudi Aramco’s average Gulf exports to between 1 million and 1.5 million barrels per day, a level comparable to or slightly higher than August’s volume.
The increase is helping offset lower shipments from Yanbu, Saudi Arabia’s Red Sea export terminal, where flows slowed after an attack on the country’s East-West pipeline.
The shift has also played a role in the recent decline in global oil prices. Markets responded to reports that Saudi Arabia was making additional crude available to Asian refiners through transfers near Sohar while working to restore approximately half of the damaged pipeline’s capacity within days.
Chinese and South Korean refiners are among the leading buyers of the additional spot supplies. Some shipments are also expected to be delivered to India and Japan.
Saudi Aramco had not immediately responded to a request for comment outside office hours.
Using an alternative export route is significant because it enables Saudi crude to reach customers without depending entirely on the infrastructure disrupted around Yanbu.
The additional supply is especially important for Asian buyers, which make up the primary market for Saudi crude. However, moving the oil has become considerably more expensive.
Supertanker freight rates reached a record level during the week. The cost of chartering a very large crude carrier capable of transporting 2 million barrels from Fujairah to Asia in early October climbed to 800 Worldscale, according to a shipbroking firm.
Japan’s Petroleum Association said its refiners had secured sufficient crude supplies through November. The organization cited ship-to-ship transfers outside the Strait of Hormuz as one factor supporting continued Saudi deliveries.
As a result, Japanese refiners have continued receiving Saudi crude despite disruptions affecting regional infrastructure and shipping routes.
The developments are an important consideration for global oil markets, which remain sensitive to the availability of Middle Eastern crude and producers’ ability to redirect exports when infrastructure or shipping routes are disrupted.
Original article
Comments