Saudi Efforts to Revive Gulf Oil Loadings Run Into Buyer Caution

i1{ll]10wlkbroyv5ion8{u(_media_dl_1.png Bloomberg

Article content

(Bloomberg) — Saudi Arabia’s attempts to revive oil flows from its reopened Ras Tanura terminal on the Persian Gulf are running into caution from customers, who are reluctant to load there because of renewed threats to shipping, according to people familiar with the matter.

Article content

Ras Tanura, which handled about 90% of Saudi crude exports before the Iran war, restarted recently after a months-long closure, and this week Saudi Aramco was asking customers to submit requests for loadings from the port, according to the people.

Article content

Article content

Article content

But buyers who had already been wary of sending in ships into the Persian Gulf to lift cargoes have become even more concerned after vessels were attacked in the Strait of Hormuz on Tuesday, the people said, asking not to be identified because the information is private. 

Article content

Article content

Tensions in the region ratcheted up after President Donald Trump said the US would likely follow up with further strikes on Iran, raising the prospect of a return to all-out war. A return of hostilities would be a nightmare scenario for the Gulf nations that had only just started to return some of their damaged energy industries and oil shipments back toward prewar levels.

Article content

Aramco has asked customers to submit requests for how much they want to load in August from Ras Tanura, but has been told by some buyers that they’re not ready to load there, the people said. The company had also been giving customers that option through the conflict even when the Strait of Hormuz was all but closed.

Article content

Clients have been picking up oil cargoes from the Red Sea port of Yanbu on the other side of Saudi Arabia since the early days of the war. Aramco is still offering that option, but wanted to prioritize Ras Tanura loadings, the people said, asking not to be identified because the information is private. 

Article content

Article content

Aramco declined to comment.

Article content

Ships Attacked

Article content

Three vessels came under attack on Tuesday — the largest number of incidents since the interim US-Iran peace deal last month. While a handful of oil tankers have passed through Hormuz since, owners will likely be cautious about the fallout. The escalating tensions pushed Brent crude futures as much as 8.7% higher to above $80 a barrel. 

Article content

It’s not just the risk to safety that’s giving buyers pause. The limited availability of tankers to load in the Persian Gulf and the high cost of freight are also a problem, the people said. 

Article content

Despite buyers’ concerns, Saudi Arabia has had some success in reviving oil exports since the US-Iran peace deal using its tankers. At the end of June, the kingdom’s crude oil shipments had surged to around 90% of prewar levels through a combination of shipments from Yanbu and its Persian Gulf facilities, according to tanker-tracking data compiled by Bloomberg. Exports were about 6.3 million barrels a day in the six days through July 1.

Article content

For August loading, Aramco is offering cargoes to buyers in Asia at a discount to the regional benchmark for the first time since 2020.

Article content

The port of Ras Tanura is made up of three terminals: the Ju’aymah crude loading points, the Ju’aymah liquefied petroleum gas terminal and the Ras Tanura oil terminal. Between them, the crude oil facilities have the capacity to handle 12 tankers at a time.

Article content