Saudi Aramco resumes crude loading at Ras Tanura after nearly four-month halt

SINGAPORE: Saudi Aramco resumed crude loading at its Ras Tanura terminal in the Gulf on Friday after a nearly four-month halt, shipping data showed, adding to signs of a recovery in regional oil supply.

Two Very Large Crude Carriers controlled by Saudi shipping arm Bahri were seen loading crude at Ras Tanura, while another tanker was heading towards the terminal. A fourth VLCC was waiting nearby. Each VLCC can carry about 2 million barrels of oil.

Ras Tanura, located on Saudi Arabia’s eastern coast west of the Strait of Hormuz, is the world’s largest oil port. Before the conflict, it exported more than 5 million barrels per day of crude. Saudi Arabia’s largest domestic refinery, with a capacity of 550,000 barrels per day, is also located there and was shut during the war as a precaution.

LSEG data showed Aramco last loaded a cargo from Ras Tanura for China on March 8. During the conflict, Saudi exports were diverted to the Red Sea port of Yanbu after the Iranian blockade of the Strait of Hormuz prevented ships from entering the Gulf.

Saudi crude exports fell to about 4 million barrels per day over the past three months from more than 7 million barrels per day in February, according to shipping data.

The resumption comes as Middle Eastern producers increase oil and gas exports following an interim agreement between the United States and Iran to halt the war and reopen the Strait of Hormuz, through which about one-fifth of global oil and liquefied natural gas supplies previously passed.

However, security concerns remain. A ship belonging to Taiwan’s Evergreen Marine was hit by an unknown object in the Strait of Hormuz on Thursday. The British navy agency UKMTO paused its ship escort operation through the strait after the incident.

Two United States officials told Reuters that Iran had fired on the ship. Iran’s Persian Gulf Strait Authority said vessels travelling outside routes set by Tehran would not be guaranteed safe passage.

Oil prices fell by more than $1 a barrel on Friday after briefly rising following reports of the cargo ship attack. Prices came under pressure as crude shipments through the Strait of Hormuz rose this week to their highest level since the conflict began.

Saudi Aramco may sharply cut its August crude prices next week as competition among producers increases.

Iraq’s SOMO and Qatar issued tenders offering crude, following similar moves by Kuwait and the United Arab Emirates. Iran is also moving to increase exports after Washington temporarily lifted sanctions.

Shipping data showed two empty VLCCs, Natsumi and Halti, entered the Gulf on Friday to load Iranian oil. Tankers carrying UAE crude also continued moving through the strait, with two laden VLCCs exiting and one heading to Zirku port.

Rystad Energy’s MENA research director Aditya Saraswat said in a note that 2 million barrels per day had returned to the market within three weeks, with recovery spread across the region.

Rystad now estimates shut-in production across the Gulf has fallen to 9.6 million barrels per day in mid-June from 11.7 million barrels per day three weeks earlier. The consultancy expects full regional supply recovery by the end of the year.