Ship-to-ship crude transfer capacity in the Gulf of Oman has come under increasing pressure as Saudi Arabia redirects oil exports through the Strait of Hormuz following the disruption of its Red Sea export route.
Trade sources and analysts said the additional Saudi volumes have increased demand for very large crude carriers (VLCCs) to shuttle cargoes through Hormuz for transfers off Sohar, Oman. The added requirements have reduced tanker availability, pushed up freight costs and extended the time crude remains at sea before reaching refineries.
Context: Strait of Hormuz Intelligence File · Strait of Hormuz shipping guide · Strait of Hormuz
Saudi Aramco has sold more than 60 million barrels of crude for ship-to-ship transfers off Sohar during this month and next, according to the report. The volumes followed an attack on the East-West Pipeline on September 13, which halted oil exports from Yanbu on Saudi Arabia’s Red Sea coast.
Operational context
Kpler data indicated that Saudi crude exports through Hormuz were on track to recover to 3.6 million barrels per day in September, from about 900,000 bpd in August. Kpler analyst Panagiotis Krontiras estimated that the increase would require between 36 and 40 additional VLCCs, with each vessel able to carry about 2 million barrels.
Oil Brokerage’s head of global shipping research, Anoop Singh, estimated that around 40 additional VLCCs were needed this month to move Saudi volumes, compared with 24 in August. He said the increase in Saudi flows would generate extra demand for approximately 15 VLCCs for shuttle operations, while another 20 vessels were effectively waiting in the Mediterranean for Yanbu to resume operations.
The stronger demand has lifted the daily time-charter rate for a VLCC carrying Middle East crude to China to a record $1.27 million, according to LSEG data.
Congestion has also been compounded by exports from other Gulf producers, including Iraq and the United Arab Emirates, which are using transfer services outside Hormuz. Market participants said tankers were queuing for access to tugboats, labour and other equipment needed for STS operations.
Vortexa said crude volumes loaded on VLCCs from ports west of Hormuz had remained near 6 million bpd since late August, equivalent to roughly three VLCC pairs beginning STS operations each day. The firm said operations were struggling to keep pace with demand.
The duration of an STS operation has risen to nearly 10 days from five to seven days previously, according to Vortexa analyst Emma Li. The delays have led some Chinese buyers to seek alternative transfer locations off India’s west coast or Malaysia, or to request direct deliveries to refineries.
The shift in trading patterns could support additional tanker activity beyond the Gulf of Oman, with market sources reporting more transfers near Malaysia’s Linggi transshipment hub and planned operations off Vadinar, India.