Saudi Oil Exports Through Hormuz Reach Critical Limit
Saudi Arabia's increased oil exports through the Strait of Hormuz have reached their limits due to ship-to-ship transfers, according to trade sources and analysts. This surge in Saudi exports requires more supertankers to shuttle crude through Hormuz, reducing ship availability and increasing shipping costs.
The East-West Pipeline attack on September 13 halted oil exports from the Red Sea port of Yanbu, forcing state-run Saudi Aramco to divert exports from the pipeline. As a result, Saudi crude exports via Hormuz were on track to rebound to 3.6 million barrels per day in September, up from about 900,000 bpd in August.
The increased demand for supertankers has driven the daily time charter rate for a VLCC that delivers oil from the Middle East to China to a record $1.27 million on Monday, LSEG data showed. The boost in tanker demand has also created queues for ship-to-ship services outside Hormuz, with traders and analysts saying that congestion is getting worse near the Strait of Hormuz due to long STS queues.