Saudis throw a 100-mn barrel lifeline for Asia

Saudi Arabia has recently sold nearly 100 million barrels of oil to Asian buyers, preventing a potential supply crisis in the region, according to industry experts. The crude oil shipments are set to take place in October and November via the Strait of Hormuz, a crucial shipping route. Major buyers include Chinese state-owned and independent refiners, as well as companies in India, Japan, and South Korea.

This extraordinary surge in sales represents roughly one day's worth of global demand and is more than double the typical volume of Saudi oil exports through Hormuz. The East-West pipeline, which circumvents Hormuz by transporting oil through the Red Sea, has yet to fully resume operations following an attack on September 10. Saudi Aramco is currently working to restart the pipeline, with hopes of a significant boost by Saturday.

In the meantime, Saudi Aramco is taking the lead in managing logistics and transporting the oil directly to Asian customers. Traders confirm that Aramco is offering to handle the entire shipping process, a move that comes as Chinese and Indian refiners grapple with soaring oil prices. Iranian oil exports have virtually ceased due to a US embargo, and Russian crude has been avoided due to escalating political risks, driving up competition for oil from Africa and Latin America.

The shift in oil transportation responsibilities from buyers to sellers has been a result of the US-Iran conflict, with Persian Gulf producers traditionally offering crude on a free-on-board basis. However, due to security concerns, refiners have been hesitant to assume shipping risks. Now, Gulf producers, including Saudi Arabia, are taking on more of the shipping burden to ensure the timely delivery of oil to Asian markets.