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Saudi Arabia sells about 100 million barrels via the Strait of Hormuz

The crude is being offered for October and November delivery, with Saudi Arabia arranging logistics to ship the cargoes to Asia through the chokepoint.

Reported · Written up by our desk · Energy

Saudi Arabia has sold about 100 million barrels of crude to Asian buyers through the Strait of Hormuz since midweek, according to OilPrice, citing trade sources with knowledge of the deals. The sales were made after Saudi Arabia pivoted away from a preferred route, the East-West pipeline to the Red Sea, which was out of service.

The 100 million barrels is roughly one day of total global oil demand, and the cargoes are being offered for October and November delivery. OilPrice also reports that Saudi Arabia, via Aramco, is taking care of logistics and shipping the crude to Asia.

Buyers include Chinese refiners, both state-owned and private “teapots,” as well as refineries in India, South Korea, and Japan. OilPrice added that the sales flurry would more than double recent flows of Saudi crude from the Hormuz route to Asia, based on Bloomberg estimates cited in the report.

The story notes that, since the East-West pipeline was shut down, Saudi Arabia offered crude from Ras Tanura to be loaded via ship-to-ship transfers at Sohar in Oman, just outside the Strait of Hormuz. OilPrice also said Saudi Arabia this week restored partial operations on the pipeline, but the full resumption was not yet clear in the report.

Additionally, OilPrice reports that increased shuttle shipping through the Strait has helped cap upside oil prices despite the pipeline outage.

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