Aramco shifts 60M barrels to Gulf route after pipeline attack

Japanese oil refiners have secured enough crude supplies to last through November despite escalating Middle East disruptions, the Petroleum Association of Japan announced on Friday, offering reassurance as fresh fighting between Saudi Arabia and Yemen's Houthis roils global energy markets.reuters

The confirmation came alongside reports that Saudi Aramco has sold roughly 60 million barrels of crude for loading in September and October via ship-to-ship transfers off Oman's Sohar port and direct loadings from its Persian Gulf terminal at Ras Tanura, according to multiple trade sources cited by Reuters. The logistical workaround is designed to bypass disruptions caused by recent attacks on Saudi Arabia's East-West pipeline, which had severely reduced crude throughput to the Red Sea port of Yanbu.business-standard+1

How Saudi Arabia Is Rerouting Supplies

PAJ President Shunichi Kito explained that Saudi Arabia is absorbing the maritime transit risk by moving crude through the Strait of Hormuz before transferring it to Japanese buyers in safer waters outside the Persian Gulf.ndtvprofit

"In some cases, oil passes through the Strait of Hormuz at Saudi Arabia's risk before being transferred to us outside the Gulf. For that reason, supplies from Saudi Arabia have not ceased entirely," Kito said in Tokyo.theedgemarkets+1

By shifting export operations back to the Strait of Hormuz and using ship-to-ship transfers off Oman, Aramco is maintaining Gulf export levels between 1.0 million and 1.5 million barrels per day, matching or slightly exceeding August figures. Chinese and South Korean refiners are among the top buyers of the spot supplies, with some volumes also heading to India and Japan.business-standard+2

Market Impact

Global oil futures fell more than $1 a barrel on Friday on reports that Saudi Arabia was seeking to restore roughly half of the East-West pipeline's capacity within days. Oil prices had climbed to near four-month highs earlier in the week after crude loadings at Yanbu were suspended and Riyadh cancelled some deliveries to Europe.reuters+2

The sudden influx of available supply to Asia has provided relief to markets, though supertanker freight rates have also hit record levels this week. The cost to charter a very large crude carrier to load two million barrels in early October from Fujairah to Asia reached 800 on the Worldscale rate, according to a shipbroking firm.business-standard+1

Broader Tensions Remain

While the supply picture has stabilized for now, the underlying geopolitical risk has not abated. The East-West pipeline attack that triggered the disruption underscores the vulnerability of Saudi Arabia's energy infrastructure to the wider Saudi-Houthi conflict. Whether Riyadh can sustain the Hormuz-based export workaround over the longer term — and at what cost — remains an open question for Asian energy importers who depend heavily on Middle Eastern crude.