The sales are lifting Saudi Aramco’s crude exports from Gulf terminals back to an average of about 1 million to 1.5 million barrels a day, around or slightly above August levels. The extra availability has eased concern over supplies disrupted on the kingdom’s western export route and contributed to a fall in oil prices on Friday.
Chinese and South Korean refiners are among the largest buyers of the spot cargoes, while some volumes are destined for India and Japan, the trade sources said. The buyers and exact allocations were not publicly disclosed.
The Gulf shipments are intended to offset part of the decline in exports from Yanbu on the Red Sea after attacks forced the temporary shutdown of the East-West pipeline, a key Aramco artery carrying crude from production centres in the east across the kingdom to the western coast.
Saudi Arabia’s Energy Ministry said the pipeline was halted as a precaution after multiple attacks in the Riyadh and Medina regions on September 10. Emergency and technical teams were deployed to secure the system and assess its integrity. The ministry did not disclose a timetable for full restoration.
The pipeline has a pumping capacity of about 7 million barrels a day, according to the ministry, making it central to Saudi Arabia’s ability to move crude to the Red Sea when shipping through Hormuz is constrained. Before the September disruption, industry estimates indicated it was carrying roughly 4 million to 5 million barrels a day.
The return of larger volumes through Ras Tanura gives Aramco another route to keep crude flowing to customers in Asia. Tankers load inside the Gulf, pass through Hormuz and then transfer cargo to other vessels near Sohar, allowing receiving ships to avoid entering the Gulf for the initial loading.
Oil futures fell more than $1 a barrel during Friday trading as the market weighed the additional Saudi cargoes and expectations that part of the East-West pipeline’s capacity could return. Brent later traded more than 2 per cent lower, while US West Texas Intermediate also declined, extending losses from earlier in the week.
The price response underscored how quickly changes in Saudi export routes can affect a market already sensitive to interruptions across the Middle East. The additional Ras Tanura loadings do not fully replace the volumes that had been moving through Yanbu, but they provide refiners with a significant alternative source of prompt supply.
The shift is particularly important for Asian refiners, which account for the bulk of Saudi crude purchases. Japan’s Petroleum Association said on Friday that the country’s refiners had secured sufficient crude through November. Its president, Shunichi Kito, said some Saudi oil was passing through Hormuz at the supplier’s risk before transfer outside the Gulf, meaning Saudi supplies had not stopped entirely.
Higher availability of crude has been accompanied by sharply increased tanker costs. Freight for very large crude carriers capable of carrying about 2 million barrels has risen as shipowners price in longer voyages, security risks and tighter vessel availability. A rate for early-October loading from Fujairah to Asia reached a record 800 on the Worldscale measure this week, according to shipping market data.
That surge in freight costs partly offsets the benefit of cheaper crude for importers, especially when vessels must be repositioned or cargoes transferred offshore, adding operational complexity to already strained regional shipping networks.
Ras Tanura, on Saudi Arabia’s Gulf coast, is one of Aramco’s principal crude-export terminals, while Sohar lies on Oman’s coast outside the Strait of Hormuz. That geography makes ship-to-ship transfers there useful when buyers seek to limit the exposure of their own chartered tankers to the Gulf.
Follow Arabian Post
Select Arabian Post as your preferred source on Google and MSN News for trusted business news and Arab politics and updates.
