Key Takeaways
- Saudi Aramco to export 60 million barrels of crude from Gulf ports.
- Exports to reach 1 to 1.5 million barrels per day, cooling global oil prices.
- Chinese and South Korean refiners among top buyers of spot supplies.
Saudi Arabia’s state oil company, Aramco, is set to boost exports from its Gulf ports, with trade sources reporting that about 60 million barrels of crude will be sold from the Ras Tanura port inside the Strait of Hormuz for loading via ship-to-ship transfer at the Omani port of Sohar this month and next.
This increase in exports, which could reach 1 to 1.5 million barrels per day, is expected to offset some of the volume lost at the Red Sea port of Yanbu, where exports slowed after the East-West pipeline was attacked.
Global oil futures fell more than USD1 a barrel on Friday, influenced by reports that Saudi Arabia is seeking to return about half the capacity of the East-West pipeline within days and is offering more crude cargoes to Asian refiners through ship-to-ship transfers off Sohar.
The increased Gulf exports are particularly beneficial for buyers in Asia, the main market for Saudi Arabian crude. However, supertanker freight rates have also hit a record this week, with the rate to charter a very large crude carrier to load 2 million barrels of oil in early October from Fujairah to Asia reaching 800 Worldscale rate.
Chinese and South Korean refiners are among the top buyers of the spot supplies, while some volumes will be going to India and Japan, according to trade sources who spoke on condition of anonymity.
Saudi Aramco did not immediately respond to a request for comment outside of office hours. However, the increased supply is expected to provide a boost to buyers in Asia, despite the higher freight costs.
The Petroleum Association of Japan stated that the country’s oil refiners have secured sufficient crude supplies through November, pointing to the ship-to-ship transfers occurring outside the Strait of Hormuz.
In some cases, oil passes through the Strait of Hormuz at Saudi Arabia’s risk before being transferred to refiners outside the Gulf, which is why supplies from Saudi Arabia have not ceased entirely, according to PAJ President Shunichi Kito.
