About 10 million barrels of Saudi crude have cleared the Strait of Hormuz in recent days, as supertankers continue to load oil from the Saudi port of Ras Tanura in the Persian Gulf and Saudi Arabia is ramping up oil exports to Asia.
Saudi oil giant Aramco, the world’s single largest crude oil exporter, has already managed to ship at least five supertankers from Ras Tanura through the Strait of Hormuz, Reuters reported on Thursday, citing shipping data and trade sources.
At least another four supertankers, the so-called very large crude carriers (VLCCs), are near Ras Tanura, one already laden with crude and three others waiting for loading, according to shipping data Reuters has reviewed.
Of the tankers that have cleared Hormuz, two are en route to China and two others to Japan, the data showed.
The recent movements of Saudi tankers suggest that the Kingdom is rushing to load and export crude oil to Asia now that the Strait of Hormuz has tentatively reopened and eased the pressure on Saudi Arabia’s oil industry.
Since the war began, Saudi Arabia has maximized the use of its East-West pipeline to direct crude from the east coast to the Yanbu port on the Red Sea, bypassing the Strait of Hormuz.
Still, the return of Hormuz traffic is a major relief for Saudi Arabia and all other Gulf producers who were forced to slash their upstream production due to the inability to ship oil and products through the Strait.
Saudi Arabia, which typically sells crude under term contracts and fixed differential to benchmarks, has turned to spot sales to Asia, trade sources told Reuters on Thursday.
The rare spot sales are believed to be means to swiftly ship cargoes out of Hormuz to buyers and at more attractive prices than the current official selling prices of large premiums to benchmarks, while spot prices have slumped since the U.S. and Iran signed the memorandum of understanding in mid-June.
The spot pricing for July loading cargoes are “very attractive” for Chinese buyers, a trade source told Reuters.
As Hormuz reopens, Saudi Arabia is competing with the other Gulf producers for sales into the prized Asian market.
This could be part of the reason why refiners and traders expect Aramco to slash the OSPs of its crude loading for Asia in August. The other reason is that Middle East’s crude benchmarks, off which Gulf producers price their crude for Asia, have crashed in the past three weeks.
By Tsvetana Paraskova for Oilprice.com
Source: Original Article
