Saudi Arabia is offering more crude oil shipments to Asian refiners via ship-to-ship transfer off Oman’s Sohar port, which is outside the Strait of Hormuz, after drone attacks damaged its East-West oil pipeline to the Red Sea and the Houthis took over the island of Perim in the Bab el-Mandeb Strait. Saudi Arabia has used its East-West pipeline to export oil via the Red Sea port of Yanbu since the Iran conflict curtailed shipping through the Strait of Hormuz. Over the past week, Saudi Arabia has doubled daily crude oil loadings at its Ras Tanura and Juaymah terminals inside the Gulf to about two very large crude carriers (VLCCs), equivalent to 4 million barrels. Separate ship-tracking data showed four VLCCs capable of carrying a combined 8 million barrels loading at Ras Tanura on September 16.
The increase in Saudi Aramco loadings comes as other Gulf producers also offer more oil for loading outside the Strait of Hormuz after securing vessels to shuttle supplies through the waterway, often with their tracking signals switched off. According to Oil Price, the ship-to-ship transfers of spot crude oil cargoes have been perfected in recent months by the United Arab Emirates (UAE), whose national oil company ADNOC has offered prompt supply in multiple tenders both within the Persian Gulf and the Fujairah-Sohar range outside the Strait of Hormuz.
Despite requests for military support from the Saudi Crown Prince Mohammed bin Salman, President Trump is so far unwilling to intervene in Yemen beyond providing intelligence sharing and targeting. The Houthis reassured the United States that the 2025 ceasefire agreement between the two sides still held and that they would not attack U.S. shipping in the Red Sea. The Houthis indicated that they would maintain a “naval blockade” of Saudi vessels, and that shipping remained “safe for other vessels and companies.”
Further, U.S. Energy Secretary Chris Wright indicated that the Saudi East-West Pipeline should be back online in days, as the pipeline was shut down as a precaution following attacks by Iran-aligned groups in Iraq. He indicated that it was a detailed assessment and that the U.S. military was helping Saudi Arabia move more oil out of the Strait of Hormuz.
Saudi Arabia’s announcement of more exports via Oman brought oil prices down, as it reduced some of the geopolitical premium from September 15 news that the East-West pipeline was damaged and needed repair. Early Wednesday morning, September 16, WTI traded at $104.63 per barrel, down $1.20 (1.13%) from the previous day, while Brent crude, the international benchmark, traded at $108.16, down $0.59 (0.54%) from the previous day. A 7.1-million-barrel build in U.S. oil inventories reported by the American Petroleum Institute also helped lower oil prices as markets expected a draw of around 1.6 million barrels.
On September 16, AAA reported average U.S. gasoline prices at $4.37 a gallon and average U.S. diesel prices at $6.31 a gallon. Diesel prices are affected by many factors, including the effective closure of the Strait of Hormuz, Russia’s diesel export ban and attacks on its refineries, U.S. refinery utilization at 98% amid a number of global refinery closures, refinery competition from jet fuel, and the short-run demand inelasticity of commercial freight and agriculture.
The Russian government has extended restrictions on diesel exports for fuel producers until the end of October, which it first implemented in July after its refineries were attacked by Ukrainian drones. Ukraine has targeted 70+ drones on Russian refinery facilities since the start of 2026, adding pressure to the already tight petroleum market. Russia was a major exporter of diesel – accounting for about 10% of global seaborne-traded diesel supplies. S&P Global estimated that about half of Russia’s refining capacity was offline by the end of August.
Conclusion
Saudi Arabia has found a way to work around damage to its East-West Pipeline from a drone attack and the suspension of loadings at its port in the Red Sea at Yanbu. The Kingdom is offering Asian refiners additional crude oil through ship-to-ship transfers near Sohar, Oman, providing another route for its oil exports and somewhat easing fears that the disruption could grow. Over the past week, Saudi Arabia has doubled daily crude oil loadings at two of its terminals inside the Gulf. Other Gulf producers are also offering more oil for loading outside the Strait of Hormuz after securing vessels to shuttle supplies through the waterway. On September 16, WTI and Brent oil prices declined, shedding some of the geopolitical premium added the day before.
