Trade industry sources said on Tuesday that Saudi Aramco, the national oil company of Saudi Arabia, has resumed loading tankers with product at its Juaymah and Ras Tanura oil terminals, which lie within the contested waters of the Strait of Hormuz.
The move suggests Aramco believes it will be able to ship its products through the Strait of Hormuz, either in coordination with Iran, or in defiance of Iran’s terrorist threats. The Saudis might even see Hormuz as safer than the alternative route through the Red Sea they have been using, as Iran’s regional proxy, the Houthi insurgents of Yemen, have “banned” Saudi Arabia from using another vital shipping chokepoint, the Bab el-Mandeb Strait.
Emma Li, a market analyst with Vortexa, told Reuters on Tuesday that the Saudis might have concluded they have no choice but to dare the Strait of Hormuz again because their only other gambit to ship oil to Asia was a lengthy route through the Mediterranean and Aramco’s Asian customers are “not happy with the long voyages and high freight cost.”
According to ship tracking services, three Saudi supertankers loaded two million barrels of crude oil apiece from Juaymah and Ras Tanura over the past week – the first time in three weeks that either port has loaded an oil cargo. Six more Very Large Crude Carriers (VLCCs) are in position to load from the ports in the near future and all of the massive ships would need to pass through the Strait of Hormuz to deliver their cargoes to Asian customers, predominantly China. Aramco made a public offer of crude oil cargoes to Asian buyers on Monday, proposing to deliver the oil via ship-to-ship transfers off Fujairah, a port city in the United Arab Emirates (UAE) that lies on the Gulf of Oman side of the Strait of Hormuz. The offer included heavy grades of crude oil, which can be refined into high-quality fuels. (Read More)
