Saudi Arabia has turned to immediate oil sales from outside the Strait of Hormuz after halting its East-West pipeline, which had stopped oil flows to the Red Sea coast. These developments follow recent attacks on the pipeline in the past week.
Details of Saudi Arabia's oil shipments
Saudi Aramco has sold about ٢٠ million barrels of oil to Asian refineries this week, which are set to be loaded from outside the Strait of Hormuz in September and October. Buyers include state-owned and independent Chinese refineries and other importers in East Asia. These developments indicate a shift in Saudi Arabia's strategy in response to the closure of the East-West pipeline.
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Consequences of the pipeline shutdown
The shutdown of this pipeline, which was one of the main routes for transporting Saudi oil to global markets, has impacted the global oil market and raised concerns about the stability of oil supply. With this route blocked, Saudi Arabia is looking to return to its traditional routes, although transportation risks still exist. Following this shutdown, Aramco has delayed shipments from the Red Sea port of Yanbu to some European customers and at least one East Asian refiner.
Given that the sold oil shipments are being loaded ship-to-ship from the Gulf of Oman, this means that while the oil volumes must pass through the Strait of Hormuz, buyers will have no responsibility regarding this part of the journey.
Alongside these developments, oil prices have also significantly increased, with prices rising by more than $٣ on Tuesday. This price increase is due to the suspension of oil loading at the Yanbu port and the halt of operations at three oil fields in Libya, which has heightened concerns about the continuity of disruptions in key oil supply routes.
Meanwhile, Omani officials announced that the Panama-flagged tanker El Gaia is being moved to port after controlling a fire on board, while two crew members of this tanker are still missing.
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