By: OrePulse

Saudi Arabia has begun routing a larger share of its crude oil exports through Oman, using ship-to-ship transfers to bypass the blocked Strait of Hormuz while repair work continues on the Houthi-damaged East-West pipeline — a shift that helped ease a run-up in oil prices this week.

Brent crude traded at $105.89 a barrel on September 17, with West Texas Intermediate at $102.39, both down from highs reached earlier in the week, when Brent briefly topped $108 a barrel, and WTI spiked above $103. That rally had followed the latest Houthi attacks on Saudi energy infrastructure, including a strike that forced the shutdown of the East-West pipeline, which normally carries crude across the kingdom to the Red Sea port of Yanbu for loading onto tankers bound for global markets.

The pipeline's shutdown stoked concern over the security of Saudi oil supply, concern that deepened after reports that state producer Saudi Aramco had canceled several crude cargoes destined for European buyers this month. Yanbu's crude inventories, according to analytics firm Kpler, have slid from nearly 21 million barrels in July to under 15 million barrels now. At Yanbu's current export pace of about 3.5 million barrels a day, that drawdown leaves only a few days' worth of exports in reserve at the port, underscoring how quickly the pipeline outage has eaten into the kingdom's buffer stocks on its Red Sea coast.

Saudi Arabia has responded by redirecting more crude to its Persian Gulf ports rather than relying solely on Yanbu, a shift that helped calm jittery traders. Aramco is reportedly using ship-to-ship transfers in the Gulf of Oman to move that oil around the blocked strait, loading crude from tankers anchored in the Persian Gulf onto other vessels waiting outside the chokepoint. The technique is not new to the region: the United Arab Emirates has refined similar transfers in recent months, with its national oil company, ADNOC, offering prompt crude supply through multiple tenders both inside the Persian Gulf and in the Fujairah-Sohar corridor outside the Strait of Hormuz.

The strait itself remains largely paralyzed. A vessel was struck in the waterway just days ago, the latest in a string of attacks that has left tanker traffic there running at single-digit levels, a small fraction of the flow that normally passes through one of the world's most heavily used oil chokepoints. That persistent risk is part of why Saudi Arabia and the UAE have both leaned on ship-to-ship transfers well outside Hormuz rather than wait for conditions in the strait to improve.

The Oman rerouting does not resolve the underlying disruption to Saudi Arabia's main west-coast export route, and for now it is a workaround rather than a fix: crude still has to reach Yanbu-bound tankers by other means, or be diverted to Gulf ports entirely. At the same time, contractors work to repair the East-West pipeline itself. How long those repairs take, and how much additional volume Saudi Arabia and Aramco can sustain moving through the Gulf of Oman route in the meantime, are likely to determine whether the modest easing seen in oil prices this week holds or gives way to renewed volatility.