Saudi Arabia Shifts Oil Exports to Include Oman Shipments

Saudi Arabia is shifting its oil exports to include shipments from off the coast of Oman, a move that could increase traffic through the Strait of Hormuz. According to people familiar with the matter, Saudi Aramco is offering Arab Medium and Arab Heavy grades on a ship-to-ship basis from locations including Sohar in the Gulf of Oman.

The oil shipments are being marketed exclusively to Chinese refiners at this time. This move follows the UAE's decision to shuttle more barrels through the Strait of Hormuz, which has helped keep oil prices under control and alleviated fears of an energy-driven inflation spike.

Saudi Aramco declined to comment on the matter. However, the kingdom's ability to divert exports to its Red Sea port of Yanbu has made it less reliant on the waterway. But recent developments have put those diverted Red Sea flows under threat after Yemen's Houthi militants declared a maritime blockade on Saudi Arabia.

Aramco's trading arm shuttled some supplies through Hormuz in May, but the kingdom's offshore fields are largely made up of medium and heavy supplies, such as Arab Medium and Arab Heavy grades. The people familiar with the matter noted that the offers are only being made to Chinese refiners at this time.