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Saudis Shift Oil Sales Through Hormuz After Pipeline Shutdown

Bloomberg Markets •
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Saudi Arabia is increasing prompt crude sales from outside the Strait of Hormuz after its East-West pipeline was shut following attacks last week. Saudi Aramco has sold about 20 million barrels to Asian refiners this week for pickup in September and October, according to traders. The buyers included Chinese state-owned and independent processors, and other East Asian importers.

The pipeline halt disrupted Saudi Arabia's ability to bypass Iran war-related shipping risks in Hormuz, the world's most critical oil chokepoint. Following the shutdown, Aramco has delayed deliveries from its Red Sea port of Yanbu to some European customers and at least one East Asian refiner. The spot cargoes will be loaded from the Gulf of Oman on a ship-to-ship basis, allowing buyers to avoid the Hormuz transit segment.

The global oil market is closely monitoring the situation, with no official word on when pipeline operations will resume. Saudi Aramco declined to comment on the delays or timeline for restoration.