Ship-to-ship oil transfers in the Gulf of Oman have reached limits after Saudi Aramco (2222.SE) diverted export volumes away from the Red Sea. The bottleneck has triggered very large crude carrier shortages, extended transfer operations to nearly 10 days, and driven daily time charter rates to a record $1.27 million.
The Bottom Line
- Export Surge: Saudi crude exports via the Strait of Hormuz are on track to rebound to 3.6 million barrels per day in September, up from approximately 900,000 bpd in August, following the September 13 attack on the East-West Pipeline.
- Tanker Bottleneck: The routing shift requires between 36 and 40 additional very large crude carriers to maintain transport flows, causing queues off Sohar, Oman.
- Freight Inflation: Daily time charter rates for supertankers delivering Middle Eastern oil to China climbed to a record $1.27 million, according to LSEG data.
Pipeline Disruptions Force Red Sea Diversions
Operations across Middle Eastern maritime corridors are facing pressure following the September 13 attack on the East-West Pipeline, which halted crude exports from the Red Sea port of Yanbu. State-run Saudi Aramco (2222.SE) responded by pivoting its supply lines back through the Strait of Hormuz, selling more than 60 million barrels of crude for ship-to-ship transfer off Sohar, Oman, this month and next.
Data compiled by analytics firm Kpler indicates that Saudi crude exports through Hormuz are on track to rebound to 3.6 million barrels per day this month. This is an increase from the roughly 900,000 bpd recorded in August. Here is the math: that nearly 3 million bpd increase requires between 36 and 40 additional very large crude carriers, each with a carrying capacity of 2 million barrels.
Supertanker Scarcity and Escalating Charter Costs
The influx of volume has altered vessel availability across regional hubs. Anoop Singh, head of global shipping research at commodity broker Oil Brokerage, noted in a September 23 market update that the number of additional supertankers required to move the same amount of oil before the war started has climbed to 40 this month, compared with 24 in August.
“That 2 million bpd uplift in Saudi flows will generate additional demand for 15 VLCCs for shuttle runs alone,” Singh stated, adding that another 20 vessels are effectively trapped in the Mediterranean awaiting the return of Yanbu to operation.
| Metric | August Figures | September Projections / Records |
|---|---|---|
| Saudi Hormuz Exports | ~900,000 bpd | 3.6 million bpd |
| Additional VLCCs Required | 24 carriers | 36 to 40 carriers |
| STS Operation Duration | 5 to 7 days | Nearly 10 days |
| Middle East-to-China VLCC Rate | Historical baseline | Record $1.27 million/day |
The resulting demand shock pushed the daily time charter rate for a VLCC carrying Middle Eastern crude to China to a record $1.27 million on Monday, as captured by LSEG metrics.
Congestion Spreads Across Regional Transfer Hubs
The operational strain is not isolated to Saudi shipments alone. Increasing exports from other Gulf suppliers, including Iraq and the United Arab Emirates, are utilizing ship-to-ship transfer services outside Hormuz simultaneously. This convergence has created queues for equipment, including labor teams and tugboats.
Analysts at Vortexa noted in a September 21 report that “VLCC STS operations have struggled to keep pace.” Total transfer volumes for crude loaded on supertankers from ports west of Hormuz have remained around 6 million bpd since the end of August, equating to roughly three VLCC pairs initiating transfers daily.
“Congestion is getting worse near the Strait of Hormuz due to long STS queues,” said Vortexa analyst Emma Li, pointing out that an individual ship-to-ship transfer now requires nearly 10 days to complete, up from the previous five-to-seven-day window.
Refiners Pivot to Alternative Logistics Routes
These bottlenecks are forcing international buyers to adapt their delivery logistics. Chinese refiners have asked sellers for alternative transfer locations, such as off the west coast of India or Malaysia, or to arrange direct delivery to refineries.
Logistical tracking data from Kpler and LSEG illustrates this shift: the Bahri-operated VLCC Gold Shine loaded 2 million barrels of Saudi crude from Ras Tanura and was headed to Quanzhou in eastern China, where facilities operated by Sinochem and the Saudi Aramco (2222.SE)-partially owned Fujian Refining operate.
Meanwhile, South Korean refiner S-Oil (010950.KS), which is majority-owned by Aramco, dispatched two supertankers to conduct ship-to-ship transfers off Vadinar along India’s western coast. Industry participants tracking movements near the Malacca Strait also report more transfer activity off Malaysia’s transshipment hub of Linggi, where supertankers discharge into smaller vessels destined for North Asia.
Market Outlook
As long as the Red Sea export route remains impaired by pipeline repairs, ship-to-ship transfer hubs in the Gulf of Oman will operate near maximum saturation. Energy markets face sustained freight rate premiums and extended voyage timelines until traditional pipeline infrastructure resumes full operational capacity.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial advice.
