Reuters reported that Saudi Arabia's changes to its crude oil export routes have pushed maritime ship-to-ship (STS) crude oil transfers in the Gulf of Oman to saturation levels.

Amid recent attacks by Yemen's Houthi rebels, Saudi Arabia has rerouted crude export volumes away from the Red Sea, causing maritime transfer infrastructure for Middle Eastern crude passing through the Strait of Hormuz to reach its capacity limit.

After an attack on an east-west oil pipeline on September 13 halted exports through the Red Sea port of Yanbu, state-owned oil giant Saudi Aramco shifted more than 60 million barrels of crude oil scheduled for delivery in September and October to be sold via STS transfers off the coast of Sohar, Oman, according to the report.

Energy analytics firm Kpler projected that Saudi Arabia's crude oil exports passing through the Strait of Hormuz this month will surge fourfold to 3.6 million barrels per day, up from 900,000 barrels per day last month.

With daily volumes increasing by approximately 3 million barrels, an additional 36 to 40 Very Large Crude Carriers (VLCCs), which typically load 2 million barrels each, have become necessary.

An oil brokerage source explained, "The increase in Saudi volumes requires an additional 15 VLCCs just for shuttle operations, while the remaining 20-plus vessels are stuck in the Mediterranean awaiting the resumption of operations at the port of Yanbu."

As competition to secure oil tankers intensifies, freight rates have skyrocketed.

According to London Stock Exchange Group (LSEG) data, the daily time charter rate for a VLCC transporting crude from the Middle East to China hit a record high of $1.27 million on September 23.

With crude volumes from traditional Gulf producers such as Iraq and the United Arab Emirates (UAE) compounded by Saudi oil, maritime transfer infrastructure including tugboats and personnel is experiencing severe bottlenecks.

Energy analytics firm Vortexa analyzed, "As waiting times grow, congestion near the Strait of Hormuz is worsening," adding, "Transfer operations that typically took 5 to 7 days now take close to 10 days."

As transfer delays become prolonged, major buyers have started seeking alternative transfer locations such as the west coast of India or Malaysia, or are demanding direct delivery to refineries.

The VLCC "Gold Shine," operated by Saudi state-owned shipping company Bahri, loaded 2 million barrels of Saudi crude at Ras Tanura earlier this week and headed to Quanzhou, China, near a refining facility in which Aramco holds a stake.

According to industry sources, S-Oil, where Aramco is a major shareholder, has also reportedly deployed two VLCCs to conduct transfers off the coast of Vadinar on the west coast of India.

A clear increase in crude transfer operations has also recently been observed off the coast of Linggi, a major Malaysian transfer hub.

A ship broker explained, "Rather than transporting crude all the way directly using large tankers, transferring it to smaller vessels and sending them to North Asia can be more advantageous in terms of cost."

(Photo: AP, Yonhap News)