Saudi Oil Lifeline May Reopen as Aramco Eyes Yanbu Restart
ING: Supply-Side Risks Stay Elevated Even as Oil Prices Pull Back What I Cover Tsvetana Paraskova is an energy and commodities journalist who has contributed to Oilprice.com for nearly a decade, covering global energy markets, commodities,… Saudi Aramco officials have informally told at least three Asian refiners that they would soon be able to pick up crude oil cargoes at the Yanbu port on the Red Sea, anonymous traders with knowledge of the matter toldBloombergon Tuesday.
Saudi Arabia has halted loadings at the Yanbu port, its key export terminal that bypasses the Strait of Hormuz, since the September 10 drone attacks on the East-West onshore oil pipeline that fed crude from the Saudi oilfields to the Yanbu port. Saudi Arabiashut downits East-West oil pipeline following the drone attacks launched from the territory of Iraq close to the Iranian border.
Thanks to the 750-mile-long East-West pipeline, the Kingdom has managed to re-route most of its crude loadings from its eastern ports in the Persian Gulf to the Red Sea port of Yanbu.
But with the East-West pipeline out of service, Saudi Arabia has hiked shuttle-shipping to the Strait of Hormuz.
Saudi oil giant Aramco has offered buyers of the crude from the Ras Tanura port in the Persian Gulf to be loaded via ship-to-ship (STS) transfers at the port of Sohar in Oman just outside the Strait of Hormuz.
Saudi Arabiahas cut off Europe for Octoberoil loadings from Yanbu.
Yet, Asian refiners could soon pick cargoes at Yanbu, according to Bloomberg’s unnamed trade sources.
Executives at Aramco have given informal assurances to at least three refiners, although no timelines have been given about when loadings should be expected.
The repairs on the East-West pipeline could take three to five weeks, two regional officials briefed on the matter toldThe Associated Presslast week.
The Saudis are working to resume partial operations at half the capacity of the pipeline within days, a source with knowledge of the matter toldBloomberglast Wednesday.
Aramco targets full capacity to return in about six weeks, according to the source.
Increased shipments through Hormuz and a recovery of the Yanbu loadings could ease market concerns about Saudi supply going to refiners, which look to maximize runs to seize astronomically high refining margins, especially in diesel.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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