Saudi Aramco officials have informally told at least three Asian refiners that they would soon be able to pick up crude oil cargoes at the Yanbu port on the Red Sea, anonymous traders with knowledge of the matter told Bloomberg on Tuesday.
Saudi Arabia has halted loadings at the Yanbu port, its key export terminal that bypasses the Strait of Hormuz, since the September 10 drone attacks on the East-West onshore oil pipeline that fed crude from the Saudi oilfields to the Yanbu port. Saudi Arabia shut down its East-West oil pipeline following the drone attacks launched from the territory of Iraq close to the Iranian border.
Thanks to the 750-mile-long East-West pipeline, the Kingdom has managed to re-route most of its crude loadings from its eastern ports in the Persian Gulf to the Red Sea port of Yanbu.
But with the East-West pipeline out of service, Saudi Arabia has hiked shuttle-shipping to the Strait of Hormuz. Saudi oil giant Aramco has offered buyers of the crude from the Ras Tanura port in the Persian Gulf to be loaded via ship-to-ship (STS) transfers at the port of Sohar in Oman just outside the Strait of Hormuz.
Saudi Arabia has cut off Europe for October oil loadings from Yanbu.
Yet, Asian refiners could soon pick cargoes at Yanbu, according to Bloomberg’s unnamed trade sources. Executives at Aramco have given informal assurances to at least three refiners, although no timelines have been given about when loadings should be expected.
The repairs on the East-West pipeline could take three to five weeks, two regional officials briefed on the matter told The Associated Press last week.
The Saudis are working to resume partial operations at half the capacity of the pipeline within days, a source with knowledge of the matter told Bloomberg last Wednesday. Aramco targets full capacity to return in about six weeks, according to the source.
Increased shipments through Hormuz and a recovery of the Yanbu loadings could ease market concerns about Saudi supply going to refiners, which look to maximize runs to seize astronomically high refining margins, especially in diesel.
By Tsvetana Paraskova for Oilprice.com
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