Gulf of Oman ship-to-ship oil transfers reach limit as Saudi exports surge

Trade sources and analysts tell Reuters that ship-to-ship transfers in the Gulf of Oman for oil from inside the Strait of Hormuz have reached their limits after Saudi Arabia diverted exports from the Red Sea.

The increasing amount of Saudi exports this month requires more supertankers to shuttle crude through Hormuz to conduct cargo transfers, they say. That has reduced ship availability, raising shipping costs and increasing the time cargoes are on the water before reaching refineries.

The ship-to-ship transfer system sees many vessels float alongside each other, connected by ropes and hoses, creating a sort of floating bridge. The shuttling process cuts the distance any one ship must travel, but the stopgap measure is complex and expensive.

Meanwhile, preliminary ship-tracking data shows vessel transits at the Strait of Hormuz fell yesterday to nine, compared with the previous day’s 14, with levels also lower than the 10-day average of around 18.

However, some vessels may be sailing through the waterways with their transponders turned off, and they are not considered in the tally.