Saudi Oil Exports Surge, Triggering Record Shipping Costs in Gulf of Oman
Saudi exports hit record levels, straining shipping capacity and raising costs in the Gulf of Oman. Ship-to-ship transfers face delays as demand surges.
POLICY WIRE — Singapore, Singapore — Saudi Arabia’s surge in oil exports has pushed ship-to-ship transfers in the Gulf of Oman to their limits, according to trade sources and analysts. The increase comes after an attack on the East-West Pipeline disrupted oil shipments from Yanbu, forcing a shift in supply routes.
State-run Saudi Aramco has sold over 60 million barrels of crude for ship-to-ship (STS) transfers off Sohar, Oman, this month and next. This move has led to a sharp rise in demand for supertankers to shuttle oil through the Strait of Hormuz, causing delays and higher costs for shipping companies.
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Analysts warn that the surge in Saudi crude exports via Hormuz could reach 3.6 million barrels per day in September, up from 900,000 in August. This would require an additional 36 to 40 very large crude carriers (VLCCs), with shipping rates hitting a record $1.27 million per day for a VLCC delivering oil to China. Meanwhile, congestion near the Strait of Hormuz is worsening, prompting buyers to seek alternative transfer points in India and Malaysia.
Reporting by Policy-Wire (PW)
