Invest1 publisher2 min readPublished
Aramco routed 60 million barrels through Oman's Sohar port after Yanbu stopped shipping
September exports came back above 4 million barrels a day from a decade low of 2.4 million in August. The entire Saudi export book now leaves through two Gulf terminals and a transfer anchorage inside the Strait of Hormuz.
The Investor · Invest desk
What happened
- Kpler's tracking puts Saudi crude exports back above 4 million barrels a day in September, up from 2.4 million in August, the kingdom's weakest export month since at least 2013.
- Houthi attacks forced the suspension of the East-West pipeline that feeds the Red Sea port of Yanbu, and no shipments have left Yanbu since September 12.
- Aramco concentrated loadings at its Gulf coast terminals, Ras Tanura and Juaymah. Their combined output of roughly 4 million bpd absorbed the volume that would have moved through Yanbu.
- About 60 million barrels of September and October loadings were sold through ship-to-ship transfers at Oman's Sohar port, mainly to buyers in China, South Korea, India and Japan.
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Why it matters
- cost Brent and WTI both fell more than a dollar on the supply news. A dollar against 4 million bpd is about $4 million a day of gross export revenue, so the kingdom funds its own volume recovery out of price.
- constraint Until the East-West line restarts, the entire Saudi export book depends on a strait the report puts at roughly 20% of global oil supply, and there is no second outlet to move barrels to.
- exposure Asian refiners now take Saudi barrels off an anchorage in a third country; China imports roughly 11 million bpd and Saudi Arabia is its second-largest supplier.
- precedent Gulf terminals absorbing Yanbu's volume means a Red Sea shutdown subtracts nothing from the market. The next attack on Yanbu can therefore produce less of a price reaction.
The 60 million barrels Aramco sold for September and October loading through Sohar work out to roughly 980,000 barrels a day across the 61 days of those two months. That is about a quarter of the 4 million bpd now going out of Ras Tanura and Juaymah [2]. Bypassing the Red Sea altogether was the purpose of the Oman route [6]. The rest of the book is eastern crude loading at the eastern terminals [5].
Saudi Arabia's 2.4 million bpd in August was its weakest export month since at least 2013, and August closed before Yanbu's last shipment on September 12 [2][4][7]. September is 1.6 million bpd higher, a 67% month-on-month gain [1]. So the pipeline outage cannot explain the trough the rebound is measured from, and the report does not say what pulled August down.
Transits through the Strait of Hormuz went from an average 1.2 million bpd on September 1 to 1.9 million by mid-month [8]. If 1.9 million bpd were the 20% of world oil supply the same report assigns to the strait, global supply would be 9.5 million bpd, against Middle Eastern flows alone averaging 17.1 million bpd over the first half of September [12][9][5]. The 1.9 million is a portion of the strait's traffic, most plausibly the Saudi share, and the jump is the reroute showing up in satellite data.
The routing capability is real, and the 67% rebound is a weaker measure of it than it looks. If maintenance or stock movements explain August's 2.4 million bpd, the Gulf terminals were never asked to do much more than they normally do. On that reading September is a return to trend with a Red Sea outage layered on it. If the East-West line restarts within weeks, the Oman transfers are a short-lived expense; the report describes them as adding cost, complexity and transit time compared with direct loading at Yanbu [13].
What to watch
- Whether the East-West pipeline restarts and Yanbu resumes loading. A restart would end the Sohar arrangement and its added cost per barrel.
- Kpler's October export figure, and whether the 60 million barrel transfer programme extends past October loadings.
- Whether Hormuz transits hold near 1.9 million bpd or fall back toward the 1.2 million recorded on September 1.