Saudi Arabia has rerouted about 60 million barrels of crude from its Gulf port of Ras Tanura for loading through ship-to-ship transfers at Oman's Sohar
port this month and next, according to Reuters, citing multiple trade sources. The move comes as disruptions at Saudi Arabia's Red Sea export terminal of Yanbu have forced the kingdom to adjust how it moves crude to international buyers. At the same time, Saudi Aramco has told at least two European refining customers that they will receive no Saudi crude next month following an attack on the pipeline linking the kingdom's oil-producing region to the Red Sea. The partial rebound in Saudi exports from the Gulf has also helped cool global oil prices, according to the Reuters report, as traders assess whether the additional volumes can compensate for some of the crude affected by the slowdown at Yanbu. Chinese and South Korean refiners are among the main buyers of the spot cargoes being moved through Oman, while some of the supply is expected to head to India and Japan.
Saudi Arabia Reroutes Crude Through Oman
The rerouting is indicative of the pressure on regional oil supply routes as the Red Sea and surrounding maritime corridors face major disruption. Saudi Arabia normally uses its infrastructure to move crude towards both Gulf and Red Sea export points, but the slowdown at Yanbu following the pipeline attack has made alternative routes increasingly important.
Trade sources cited by Reuters said the barrels are being moved from Ras Tanura in the Gulf to Oman's Sohar, where they are loaded through ship-to-ship transfers. The arrangement allows Saudi crude to continue reaching overseas buyers while avoiding some of the constraints affecting the kingdom's normal export routes.
Chinese and South Korean refiners are among the largest buyers of the spot supplies. Sources also told Reuters that some of the cargoes will be delivered to India and Japan, giving Asian refiners access to additional Saudi crude even as European customers face a different situation.
Saudi Aramco Tells European Buyers No Crude Next Month
While Asian refiners are receiving some of the rerouted Saudi barrels, European customers have been told they will receive no Saudi crude next month, according to people familiar with the decision cited by Reuters. Saudi Aramco normally supplies European refiners through term contracts designed to provide regular monthly shipments, but those deliveries will not take place next month.
The decision reportedly applies to all European buyers, with the people familiar with the matter speaking anonymously because the information has not been made public. Before the shutdown, European countries imported around 577,000 barrels of Saudi crude per day, highlighting the scale of the supply stream now facing disruption.
The difference between the two export flows is significant. Saudi Arabia is finding ways to move substantial volumes of crude from its Gulf infrastructure through Oman, but that does not mean those barrels will be distributed evenly across its traditional markets, with Asian refiners emerging as major buyers of the available spot supplies.
The attack on the pipeline to the Red Sea has therefore created a reshuffling of Saudi crude flows rather than simply removing production from the market. Yanbu's reduced exports are being met in part by alternative Gulf shipments, while European customers face the loss of their regular Saudi supplies next month.
