Saudi Arabia is offering more loadings of crude oil to Asian refiners via ship-to-ship transfer off Oman’s Sohar port after the recent drone attacks damaged its key oil pipeline to the Red Sea.
State-owned oil giant Saudi Aramco has reportedly offered its flagship Arab Light grade, as well as Arab Medium and Arab Heavy, to term buyers in Asia for loading off Sohar, which is outside the Strait of Hormuz.
“The offers indicate that Aramco is moving more crude out of the Gulf for onward transfer outside the waterway. Recently, Aramco has made at least two similar offers of Arab Medium and Arab Heavy to Asian buyers,” reported Reuters.
Over the past week, the Kingdom has doubled daily crude loadings at its Ras Tanura and Juaymah terminals inside the Gulf to about two very large crude carriers, equivalent to four million barrels, according to satellite tracking by consultancy Energy Aspects.
Separate ship tracking data from Kpler showed four VLCCs capable of carrying a combined eight million barrels loading at Ras Tanura on September 16.
While Aramco has increased its loadings and supply volume-related activities, other Gulf producers are also offering more crude for loading outside the Strait of Hormuz after securing vessels to shuttle supplies through the waterway, with switching off the vessel tracking devices emerging as the most preferred method.
Saudi Arabia, known as the world’s biggest oil exporter, has relied on its East-West pipeline to divert crude to the Red Sea port of Yanbu for export to avoid shipping its energy consignments through the Strait of Hormuz.
However, last week, drone attacks damaged the pipeline, forcing the Kingdom to shut it down, sending global oil benchmarks to multi-month highs.
Saudi has also informed its European customers that some September-loading crude cargoes will be cancelled, with loadings at Yanbu remaining suspended.
Top customers like Poland have reportedly rushed to seek alternatives, with cargo prices breaching the USD 100 mark again, after a brief lull.
The cut in Saudi flows through the Red Sea may end up prompting Riyadh to try to export more oil via the Strait of Hormuz using so-called dark shipments similar to those already used by the UAE and Iraq.
Such shipments have allowed Gulf oil producers to export seven million to nine million barrels per day, which is 30% to 40% of pre-war volumes.
Saudi Arabia, in the week of September 7 to 13, loaded 22 million barrels of oil across 12 vessels at Ras Tanura/Juaymah, as opposed to six to seven vessels per week for the prior three weeks, data from Vortexa showed.
As per the sources, Polish integrated oil firm Orlen PKN.WA was rushing to find crude oil cargoes from the North Sea and further afield to replace disrupted Saudi imports.
Aramco emerged as Orlen’s top oil supplier in 2022 and now supplies around 40% of its oil, helping to diversify from risky Russian energy intake.
Orlen has reportedly purchased several cargoes of crude oil in spot tenders, apart from picking up North Sea grades including Grane, Johan Sverdrup, and Johan Castberg.
The oil venture has also tendered for grades further afield, including US WTI Midland and Kazakh CPC Blend. Another tender has been issued this week to buy North Sea or Algerian crude for October delivery and Guyanese crude for November delivery.
The Baltic port of Gdansk in Poland received around 160,000 bpd of Saudi crude this year to date, and Lithuania’s Butinge received 63,000 bpd, data from analytics firm Kpler showed.
“Feedstock deliveries to Orlen refineries are proceeding without disruption,” the company spokesperson said.