Saudi Arabia sold 100 million barrels of crude oil to the Asian market

According to information obtained from sources close to the subject, Saudi Arabia has sold approximately 100 million barrels of crude oil to the Asian market as of the middle of last week.

It was stated that the oil to be delivered in October and November will be sent through the Strait of Hormuz. It was stated that buyers included Chinese state companies and independent refiners, as well as processors in India, Japan and South Korea.

It was stated that this extraordinary sales move, which coincided with approximately one day of global daily oil demand, represented more than twice the last flow of Saudi Arabia to Asia via Hormuz.

DISTURBANCES IN THE EAST-WEST PIPELINE DIVERTED SHIPMENTS TO HORMIS

It was reported that the increase in shipment was due to the fact that Saudi Arabia's East-West pipeline, which bypasses the Strait of Hormuz and carries oil to the Red Sea, has not yet been able to operate at full capacity after the attack on September 10.

It was noted that Saudi Aramco continues its efforts to restart the flow in the pipeline at an early stage and aims for a significant recovery by Saturday.

While pipeline disruptions forced Saudi Arabia to export more oil via Hormuz, satellite data revealed that shipments within the Persian Gulf rose over the weekend. It was stated that Aramco offered to undertake all transportation and logistics processes until the crude oil reaches Asian customers.

CRITICAL SUPPLY AND TRANSPORTATION RISKS FOR THE ASIAN MARKET

The sales, which took place at a time when Chinese and Indian refineries were discussing reducing production rates due to rising prices, were positively received in the Asian market.

The interruption of Iranian oil flow due to the US blockade and buyers' avoidance of Russian crude oil due to increasing political risks had increased the competition between different types of oil from Africa to Latin America.

On the other hand, during the US-Iran tension, the responsibility of transporting oil gradually passed from buyers to sellers. While Persian Gulf producers generally offered oil on a delivery basis at the port in the past, Gulf producers began to take on transportation risks when refineries refrained from sending ships due to conflict risks.

For sellers such as SOMO, the Iraqi state oil marketing company, that cannot manage its own transportation, intermediaries such as TotalEnergies SE, Vitol Group, Trafigura Group and Abu Dhabi National Oil Company (ADNOC) have stepped in.

Saudi Aramco declined to make a statement on the issue.