By: OrePulse

Saudi Aramco loaded an estimated 14 million barrels of crude onto seven very large crude carriers at its Arabian Gulf terminals over the weekend, the largest tanker turnout recorded since June, as the kingdom pressed ahead with rerouting exports around a still-idled pipeline to the Red Sea. The pickup in loadings helped tip Brent crude below $100 a barrel for the first time since September 9, as markets weighed the prospect of higher near-term supply.

Ship-tracking data placed the seven supertankers near the Ras Tanura export terminal on Saudi Arabia's eastern coast. JPMorgan analysts, citing satellite imagery, put Saudi Arabia's crude flow through the Strait of Hormuz at an average of 2.9 million barrels a day over the prior six days — a sharp rise from about 700,000 barrels a day in August. The numbers reflect an incremental rebuild of Saudi Arabia's export capacity while the Red Sea corridor remains offline.

The buildup traces back to drone strikes earlier this month that knocked out the East-West Pipeline, also known as Petroline, which normally carries up to 7 million barrels per day from the kingdom's eastern producing fields to the Yanbu terminal on the Red Sea. [uncertain: accounts differ on the exact date of that strike, citing either September 11 or September 13.] The attack is estimated to have removed 4 million to 5 million barrels per day of pipeline capacity, forcing Aramco to halt loadings at Yanbu, cancel several European cargo sales and divert additional volumes to Asian buyers from its Gulf terminals instead.

Saudi export infrastructure came under renewed attack in the days that followed. According to Houthi statements, the Yemeni group carried out a barrage combining cruise missiles, ballistic missiles and drones against areas in and around Riyadh as well as Aramco's Yanbu facility over September 18-19, calling the port a civilian site. Riyadh's air defenses were reported to have shot down the missile aimed at the capital, and Saudi officials said there were no casualties. U.S. Energy Secretary Chris Wright said afterward that he expected the pipeline to resume operating "within days," though industry analysts cautioned that repairing pump stations damaged in the strikes could take six weeks or longer.

To keep crude moving in the meantime, Aramco has been dispatching smaller vessels from Ras Tanura to Oman's Sohar port on the Gulf of Oman, where cargoes are shifted ship-to-ship onto larger tankers before continuing overseas. Trade sources said the kingdom has sold roughly 60 million barrels of crude for delivery in September and October through this alternate route, with cargoes headed mainly to refiners in China and South Korea.

The rerouting has visibly reshaped Saudi Arabia's loading pattern. Gulf terminal loadings have averaged 3.7 million barrels per day since September 12, up from about 2.9 million barrels per day earlier in the month, according to tracking firm Vortexa, while Red Sea loadings had averaged 3.9 million barrels per day between September 1 and 11, before the outage began. A separate estimate put the decline in overall Saudi crude loadings at more than 70 percent — from an earlier 7.5 million barrels a day this year down to roughly 2.1 million barrels a day by mid-September. [uncertain: this broader figure is difficult to reconcile with the port-level loading data cited elsewhere and may reflect a different measure or time frame.]

Even with the higher volumes moving out of the Gulf, overall vessel traffic through the Strait of Hormuz has thinned. Only about a dozen commodity vessels transited the strait in the most recent count, down from 35 a week earlier.

The added supply expectations weighed further on crude prices. West Texas Intermediate futures dropped 3.11 percent to $97.18 a barrel. [uncertain: Brent's own decline was put at 2.82 percent to $100.90 a barrel in one account, a level that would not itself represent a move below $100; the precise settlement figure behind the sub-$100 print cited above could not be confirmed.]

Aramco has not said when the East-West Pipeline is expected to be fully restored, and the kingdom's reliance on the longer, more costly Gulf-of-Oman routing is expected to continue until repairs are complete.