Saudi Arabia has sold almost 100 million barrels of crude to Asian buyers via the Strait of Hormuz since the middle of last week, when it pivoted to the chokepoint it wanted to avoid with the East-West pipeline to the Red Sea.
With the pipeline out of service, the Kingdom has sold 100 million barrels of crude, which is roughly one day of total global oil demand, to Asian buyers for October and November delivery through the Strait of Hormuz, trade sources with knowledge of the deals told Bloomberg on Thursday.
The Saudis are offering to take care of the logistics and ship the cargoes to Asia, according to Bloomberg’s sources who wished to remain anonymous.
Buyers of the Saudi crude include Chinese refiners, both state-owned and teapots, plus refineries in India, South Korea, and Japan.
The sales flurry from Saudi oil giant Aramco would more than double the recent flows of Saudi crude from the Hormuz route to Asia, according to Bloomberg’s estimates.
Since it was forced to shut down the East-West pipeline that bypasses Hormuz, Saudi Arabia has offered buyers of crude from the Ras Tanura port to be loaded via ship-to-ship (STS) transfers at the port of Sohar in Oman just outside the Strait of Hormuz.
The Kingdom has hiked shuttle-shipping to the Strait of Hormuz, and the rise in Saudi crude oil exports through the Strait has capped the upside in oil prices despite the outage of the East-West pipeline.
Saudi Arabia this week restored partial operations on the pipeline, but full resumption of flows of about 4 million barrels per day (bpd) would likely take weeks.
Meanwhile, the soaring Saudi sales of crude via Hormuz will keep some supply going to Asia while Red Sea exports recover. Higher Hormuz shipments could also ease concerns about tumbling supply and cap oil price spikes.
By Charles Kennedy for Oilprice.com
More Top Reads From Oilprice.com
- U.S. to Back Argentina’s First LNG Export Project With $6 Billion Loan
- Just One Commodity Vessel Left the Strait of Hormuz on Wednesday
- Europe’s Gas Prices Jump as Hormuz Standoff Drags On
