Tankers Use a New Route to Keep Gulf Oil Moving

Credit: CMBTech Helios Crew

Oil producers in the Gulf are using ship-to-ship (STS) transfers off Oman to keep oil exports moving while the Strait of Hormuz remains under pressure. Shuttle tankers carry crude from Gulf terminals to safer waters, where the oil is transferred to larger vessels for trips to Asia. Reuters reports that about 2.5 million barrels per day could be moved through these operations in September, up from 1.4 million bpd in August.

The system began as an emergency solution but is now being used on a larger scale. ADNOC started using shuttle tankers in April, while Saudi Aramco has also increased STS transfers as other export routes face problems. This allows some tankers to avoid longer and more risky trips through the Strait of Hormuz.

But the new system is expensive. Freight costs for VLCCs carrying Gulf oil to China have risen above $30 per barrel, Reuters reported, citing LSEG data. More ships, extra transfers and longer operations are increasing costs for oil producers and reducing the number of tankers available for other voyages.

Global News

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