Oil Slips as Saudi Arabia Offers Crude Loadings Off Oman's Sohar Port

Brent crude changed hands at $104.9 a barrel on Thursday, down 0.89%, while West Texas Intermediate traded at $101.8, lower by 0.64%. The readings were taken at 11:50 am AST Arabia.

Both contracts had climbed earlier in the week, when Brent touched $108 and WTI moved above $103. The driver was the shutdown of Saudi Arabia's East-West pipeline, a line that carries crude across the country and that carries added weight while traffic through the Strait of Hormuz stays restricted. Saudi Arabia's Ministry of Energy described the closure as precautionary, and said it followed drones launched from Iraq on September 10.

Sasha Foss, an energy analyst at CSC Commodities, a division of Marex, expects futures to retreat further. In a note Thursday she pointed to reports that the East-West pipeline may restore its volume sooner than had been assumed. "Saudi Arabia is also likely to begin more shuttle runs through the Strait of Hormuz – something they shunned unlike their neighbors since the conflict began," Foss wrote.

Saudi Arabia is also likely to begin more shuttle runs through the Strait of Hormuz – something they shunned unlike their neighbors since the conflict began,

Aramco offers loadings off Sohar

Saudi Aramco has offered its flagship Arab Light grade, together with Arab Medium and Arab Heavy, to term buyers in Asia for loading off Oman's Sohar port. Reuters reported the offers Wednesday, citing sources familiar with the matter.

The move puts more Saudi crude outside the Gulf for transfer beyond the waterway, by way of ship-to-ship operations in which cargo passes between vessels at sea rather than being lifted at a terminal. Aramco has reportedly made at least two comparable offers of Arab Medium and Arab Heavy to Asian buyers in recent weeks.

At least one Asian buyer holding cargoes scheduled to load this month received notice from Aramco that shipments out of Yanbu, on the Red Sea, would be delayed and given new dates.

Attacks on merchant shipping

The International Maritime Organization said it had verified 80 attacks on merchant vessels in and around the Strait of Hormuz as of September 16, with at least 22 seafarers killed since the conflict began on February 28.

Attacks in the Red Sea have restarted as well. Four people died in the most recent Houthi strike on a merchant vessel, on August 11, IMO Secretary-General Arsenio Dominguez said in a statement Wednesday.

The two fronts now sit alongside each other for shipowners and refiners: a Gulf route that Saudi Arabia is partly working around through Omani waters, and a Red Sea approach that had quieted before August. For Asian term buyers, the practical question is which cargoes arrive on schedule and which are pushed to later dates, as at least one of them has already been told.