Saudi Oil Surge Overloads Gulf of Oman Ship-to-Ship Transfers

Ship-to-ship oil transfers in the Gulf of Oman have reached their limits due to a surge in Saudi Arabian exports, trade sources and analysts said. The diversion of Saudi oil from the Red Sea has added to shipments from other producers, requiring more supertankers to shuttle crude through the Strait of Hormuz.

This increase in demand has reduced ship availability, pushing up shipping costs and extending the time cargoes are on the water before reaching refineries. State-run Saudi Aramco has sold over 60 million barrels of crude for STS transfer off Sohar, Oman, since its East-West Pipeline was attacked on September 13.

The boost in tanker demand has driven up the daily time charter rate for a VLCC to a record $1.27 million, according to LSEG data. Analysts expect this trend to continue, with some predicting that the number of additional VLCCs required to move oil before the war started will rise to 40 this month.