Saudi Arabia has sold 60 million barrels of crude oil from the port of Ras Tanura in the Persian Gulf for loading in September and October. This export is primarily conducted through ship-to-ship (STS) transfer at the port of Sohar in Oman, near the Strait of Hormuz.
East-West Pipeline Shutdown
This action comes after Saudi Arabia was forced to shut down its East-West pipeline due to drone attacks from Iraq towards the Iranian border. This pipeline, which is 750 miles (about 1200 kilometers) long, allows Saudi Arabia to transport its oil shipments from the eastern ports of the Persian Gulf to the port of Yanbu on the Red Sea. The shutdown of this pipeline has led Saudi Arabia to return to the Strait of Hormuz to maintain its oil exports at a reasonable level.
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Loading Locations and Export Destinations
According to available information, the high volume of Saudi oil exports through the Strait of Hormuz is mainly absorbed by refineries in China and South Korea, although some shipments are also reserved for Japan and India. This increase in Saudi oil exports from the Strait of Hormuz has had a significant impact on oil prices, as concerns about Saudi Arabia's ability to continue oil exports have decreased despite the East-West pipeline shutdown.
The oil market seems to be slowly adjusting to its new situation. On Friday morning, oil prices were trending towards a weekly decline, while reports of ship-to-ship transfers in the Gulf of Oman appear to have affected concerns about the security of Saudi oil supply. These developments reflect Saudi Arabia's efforts to maintain its position as a reliable oil supplier in the global market.
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