Saudi reroutes crude via Hormuz as pipeline outage eases oil price dip

Oil prices slipped on Thursday as Saudi Arabia began shifting additional crude exports through ship-to-ship transfers near the Strait of Hormuz, easing market worries about a potential supply shortfall. Brent futures fell $1.01 to $104.82 a barrel, while U.S. West Texas Intermediate dropped 52 cents to $101.91.

Sources familiar with the matter told Reuters that Saudi cargoes are being moved to Asian refiners via transfers just outside Hormuz, near Oman’s Sohar port. Shuttle vessels carry the oil through the strait and hand it to tankers waiting offshore, a practice that avoids the risk of Iranian attacks.

Matt Smith, director of commodity research at Kpler, said Saudi crude loadings at Gulf ports have risen this month and ship transfers in the Gulf of Oman have increased to about 2.7 million barrels per day from 1.5 million bpd in August, though it is unclear which Gulf states are behind the surge.

U.S. Energy Secretary Chris Wright told CNBC that Saudi Arabia took “quick action” to boost exports through Hormuz with U.S. military assistance. Earlier in the week, Saudi Arabia halted loadings at its Red Sea terminal in Yanbu and cancelled some shipments to Europe, according to industry sources.

The shutdown follows damage to the East-West pipeline from a drone attack launched from Iraq. Wright described the outage as a “brief and temporary interruption” measured in days, but analysts caution repairs could take weeks or months. Rapidan Energy projects Saudi exports could fall by 400,000 barrels per day this month, though higher Hormuz shipments may partly offset the loss. The firm warned that risk remains skewed toward a larger disruption if the outage extends beyond September or if regional attacks intensify.