Saudi Aramco has resumed oil loading from inside the Strait of Hormuz following a suspension during recent U.S.-Iran conflicts. According to shipping data and trade sources reported by Reuters, the world's top oil exporter offered some Asian refiners Arab Medium and Arab Heavy crude cargoes for loading via ship-to-ship transfers off Fujairah in the United Arab Emirates this month. The company had halted sales for weeks following attacks on its tanker fleet in the Strait of Hormuz during an escalation of the U.S.-Iran conflict last month. As per Reuters, more tankers are now waiting to load as the resumption gains momentum, with the latest data confirming that Saudi Aramco resumed loading oil through the Strait of Hormuz last week. This represents a significant milestone in the restoration of normal export operations.
Three very large crude carriers (VLCCs) - Malaysia Prosperity, Algeria Prosperity and Singapore Prosperity - loaded 2 million barrels of crude each from the Juaymah and Ras Tanura terminals from August 12 to 16. As reported by Business Standard and The FE, data from shiptrackers Vortexa and Kpler showed a gap of three weeks since the last loading at these ports. It was not immediately clear which grades the tankers were carrying, with Saudi Aramco and Sinokor, which owns the tankers, not immediately responding to requests for comments. According to Reuters, this recent wave of loading operations demonstrates the renewed activity in the Strait of Hormuz after the temporary suspension, with the latest data showing that more tankers are now waiting to load as the resumption gains momentum.
According to provisional data from Kpler reported by Business Standard and The FE, six more VLCCs could load Saudi oil from inside the strait later this month. Traders indicated that Saudi Aramco could deploy Saudi tankers for Hormuz transit, in addition to Sinokor vessels. Seven VLCCs owned by Saudi-based operator Bahri were floating off the UAE and Oman while two more were heading to Fujairah, shipping data on LSEG showed on Tuesday. The latest Reuters report confirms that more tankers are now waiting to load, indicating sustained demand for Saudi crude from Asian refiners and demonstrating the renewed confidence in the Strait of Hormuz route for Saudi crude exports.
However, Saudi oil exports remain curtailed as the producer faces a blockade by the Yemeni Houthis in the Red Sea, where Aramco diverted its exports to the port of Yanbu earlier during the Iran war. The producer has offered additional crude cargoes for loading from Egypt's Mediterranean port of Sidi Kerir as an alternative, but the volume is a fraction of the pre-blockade level of 4 million barrels per day exported from Yanbu. About 670,000 barrels per day of Middle Eastern crude are expected to be loaded at the Sidi Kerir port for Asia this month, Kpler data showed, from zero in the previous three months. As noted by Emma Li, Vortexa's China market analyst, the Sidi Kerir offering to Asia is likely not working as Asian customers, particularly the Chinese, are not happy with the long voyages and high freight costs associated with the alternative route.
The resumption of Saudi exports could help ease the tight supply of heavier grades that produce more residue fuel which can be used to refuel ships or can be processed further at refineries to yield higher-quality fuels such as gasoline and diesel. The move aims to alleviate a supply crunch while facing challenges posed by the Yemeni Houthis' blockade in the Red Sea. According to Business Standard and The FE, this shows that the Sidi Kerir offering to Asia is likely not working, as Asian customers, at least the Chinese, are not happy with the long voyages and high freight costs associated with the alternative route. The latest Reuters report confirms that more tankers are now waiting to load, suggesting renewed confidence in the Strait of Hormuz route for Saudi crude exports and demonstrating the strategic importance of this key shipping corridor for global energy markets.
