Saudi Arabia sells nearly 100 million barrels of oil to Asia, easing looming supply crunch

Saudi Arabia has sold nearly 100 million barrels of oil to Asian buyers since mid-last week, according to traders, easing concerns about a potential supply crunch in the region. The crude destined for October and November delivery will be transported via the Strait of Hormuz, according to unnamed sources. Buyers include Chinese state-run and independent refiners, as well as processors based in India, Japan, and South Korea.

This sales surge equals roughly one day of global demand and represents a more than doubling of recent Saudi oil shipments through Hormuz. The East-West pipeline, which avoids Hormuz by delivering oil to the Red Sea, is still not fully operational following an attack on September 10. Consequently, Saudi Aramco is in the early stages of restarting the pipeline and aims for a meaningful restoration by September 26.

The pipeline issues have prompted Saudi Arabia to increase oil exports through Hormuz, with satellite data indicating a surge in loadings from the Persian Gulf over the weekend. Aramco is also offering to manage logistics and transport the crude directly to Asian customers, addressing the region's growing concerns over rising oil prices and supply constraints.

As Iranian exports have halted due to a US blockade and Russian crude is avoided due to political risks, Asian buyers have intensified competition for oil grades from Africa to Latin America. The shift in oil transportation responsibilities from buyers to sellers during the US-Iran conflict has led to Persian Gulf producers offering more shipping support.

Companies like TotalEnergies, Vitol Group, Trafigura Group, and Abu Dhabi National Oil have assisted in moving the oil out of the Persian Gulf.