Saudi Arabia imitates the UAE to expand maritime transportation of crude oil and plans to sell heavy crude oil off the coast of Oman

The Zhitong Finance App learned that Saudi Arabia is seeking to sell crude oil to buyers off the coast of Oman, indicating that at a time when shipping in the Strait of Hormuz continues to be disrupted, Saudi Arabia may be following the UAE's example and shipping more crude oil out of the Persian Gulf through ship-to-ship transfers to maintain export supply.

According to people familiar with the matter, Saudi state-owned oil giant Saudi Aramco is providing crude oil cargo delivered “ship-to-ship”. Delivery locations include near Sohar in the Gulf of Oman. The types of crude oil sold this time include Arabian medium crude oil and Arabian heavy crude oil. Since Saudi medium and heavy crude oil mainly comes from offshore oil fields within the Persian Gulf, these goods are likely to be shipped from within the Persian Gulf and then transferred to the waters off Oman for sale. Saudi Aramco declined to comment.

Recently, major oil producers in the Middle East have continued to seek alternative transportation methods to transfer large quantities of crude oil from the Persian Gulf to regions outside the strait. Against the backdrop of rising transport risks in the Strait of Hormuz, these additional supply channels will help ease market concerns about drastic interruptions in Middle Eastern crude oil exports, and to a certain extent curb the risk of rising international oil prices and further heating up of inflation driven by energy prices.

Compared with other oil producers in the Persian Gulf, Saudi Arabia has previously been relatively slow to expand maritime transit, mainly because it has an east-west oil pipeline connecting the Persian Gulf and the Red Sea, which can transport some crude oil to Yanbu Port on the Red Sea coast for export, thereby reducing its dependence on the Strait of Hormuz. However, in recent weeks, this alternative route has also faced new risks. Yemen's Houthis announced a maritime blockade against Saudi Arabia, making crude oil exports transported via the Red Sea face greater uncertainty.

Meanwhile, recent signs suggest that Saudi crude oil shipments on the Persian Gulf side are picking up. Satellite images show that in the past week, tankers with a total carrying capacity of about 9 million barrels were loaded at or near Saudi Arabia's major crude oil export hub Rastanoura. Saudi Arabia has also assembled a large number of oversized tankers off the Persian Gulf to provide capacity support for further crude oil transfers.

Saudi Aramco CEO Amin Nasser said in March this year that the east-west pipeline to Yanbu Port mainly transports Arabian light and Arab ultra-light crude oil. In contrast, Saudi offshore oil fields are mostly located within the Persian Gulf and mainly produce medium and heavy Arabian crude oil. This further indicates that the medium and heavy crude oil currently sold near Sohar in the Gulf of Oman may have crossed the Strait of Hormuz by sea.

With the Strait of Hormuz and the Red Sea facing geopolitical risks, Saudi Arabia is expanding ship-to-ship crude oil transactions near the Gulf of Oman, showing that Middle Eastern oil producers are maintaining exports through more flexible logistics and transit arrangements. Whether such crude oil flows that “bypass traditional shipping models” can continue will also be an important factor affecting global crude oil supply and oil prices.