Saudi Aramco has offered additional crude oil cargoes for September loading outside the Strait of Hormuz, with some recent Saudi oil shipments already heading towards China, according to four sources familiar with the matter. The development comes as oil producers and buyers continue to adjust shipping arrangements amid security risks affecting movements through the strategic waterway.
The Saudi energy company has offered Arab Medium and Arab Heavy crude to Asian buyers for a second consecutive week. The cargoes are being offered through ship to ship transfers off Fujairah in the United Arab Emirates or Sohar in Oman, both of which are located outside the Strait of Hormuz. According to the sources, bids for the latest cargoes were due on Wednesday.
The latest sales activity follows Aramco’s reported sale of at least 4 million barrels of Saudi crude to Chinese buyers earlier this month. Shipping data from Vortexa and Kpler showed that two supertankers carrying a combined 4 million barrels of Saudi crude were travelling towards China after receiving their cargoes through ship to ship transfers off Sohar.
The shipping arrangements indicate that Aramco is using alternative methods to move crude outside the Strait of Hormuz. Shipping data showed that the company has resorted to moving cargoes aboard tankers whose tracking systems were switched off during transit through the strait, according to the report. Aramco has declined to comment on the shipping arrangements.
The Strait of Hormuz remains a major route for global energy supplies. Before the conflict between the United States and Iran began on February 28, around one fifth of the world’s oil and gas moved through the waterway. Disruptions affecting the route have therefore created additional challenges for producers, shipping companies and buyers seeking to maintain crude supplies.
One of the recent shipments involved the very large crude carrier Singapore Prosperity. According to shipping data, the vessel transferred its Saudi crude cargo around August 22 to another very large crude carrier, Xin Hui Yang. The receiving vessel is expected to reach Ningbo port in eastern China on September 15.
Another shipment followed a similar arrangement. On Tuesday, the very large crude carrier Algeria Prosperity transferred its cargo to Xin Han Yang. The vessel is expected to arrive at Zhanjiang port in southern China on September 12, according to shipping data.
Both of these cargoes are expected to be delivered to Sinopec, which is described in the report as the world’s largest refiner. Sinopec had not immediately responded to requests for comment regarding the shipments.
The latest cargo movements demonstrate the use of ship to ship transfers as an alternative method for transporting Saudi crude while avoiding direct passage through the Strait of Hormuz. Such transfers allow cargoes to be moved between tankers at locations outside the strait before the receiving vessel continues towards its destination.
Aramco has also sold at least 4 million barrels of heavier crude grades to PetroChina and Sinochem, according to the sources. These sales took place last week after Aramco resumed oil loading operations at the Ras Tanura port earlier in August.
The additional crude offered for September loading gives Asian buyers another opportunity to secure Saudi supplies through alternative delivery arrangements. The offers also come as refiners and traders continue to monitor the availability and movement of crude amid disruptions to established shipping routes.
For China, the recent shipments add to supplies from Saudi Arabia at a time when crude transportation arrangements are undergoing changes. The movement of the cargoes through ship to ship transfers at Sohar before continuing towards Chinese ports demonstrates how suppliers and buyers are adapting their logistics to changing conditions.
The latest developments also highlight the importance of alternative export and transportation routes for major oil producers. By offering cargoes outside the Strait of Hormuz and using transfer points such as Sohar and Fujairah, Aramco is providing Asian customers with crude through arrangements that reduce reliance on direct tanker movements through the strategic waterway.
Aramco’s September offers, together with the recent shipments to Chinese refiners, point to continued efforts to maintain the flow of Saudi crude to Asian markets despite disruption and volatility in global energy transportation. The company’s sales to Sinopec, PetroChina and Sinochem also underline the importance of China as a major destination for Saudi crude.
Follow the PakBanker Whatsapp Channel for updates across Pakistan’s banking ecosystem.