Saudi Arabia Routes More Crude Through Strait of Hormuz While Also Using Bypass Pipeline

Saudi Arabia has increased crude oil loadings inside the Persian Gulf in recent days while also routing higher volumes through its East-West pipeline that bypasses the Strait of Hormuz. The combined movements have produced fresh loadings rather than draws from storage. About 10 million barrels of Saudi crude cleared the Strait of Hormuz during the period.

Shipping data show Saudi Aramco sent at least five supertankers through the strait. At least four very large crude carriers were positioned near the port of Ras Tanura, one already laden and three awaiting cargo. Two of the tankers that transited the strait sailed to China and two to Japan.

Saudi Arabia has shifted to spot sales to Asian buyers, with July-loading cargoes priced at levels described as attractive to Chinese refiners. The Kingdom had previously directed more crude through the East-West pipeline to the Red Sea port of Yanbu to avoid the strait. The return of direct Hormuz traffic supports higher overall export volumes to Asian markets.

Refiners and traders expect Saudi Aramco to lower official selling prices for August loadings.