01-08-2018

Saudi VLCCs gather off Oman after Bab el-Mandeb ban

Saudi-owned VLCCs have started to gather off the southern coast of Oman after state-owned Saudi Aramco temporarily halted oil shipments through the Bab el-Mandeb strait at the bottom of the Red Sea, impeding its access to Europe.

Three part-laden VLCCs owned by Saudi state shipping company Bahri — the Marjan, the Khuzama and the TI Hawtah — have interrupted their voyages over the past 24 hours to wait at the port of Salalah in south-west Oman, according to S&P Global Platts trade flow software cFlow.

State-owned Saudi Aramco temporarily suspended its oil shipments through the Bab el-Mandeb strait on July 25 after it said two of its VLCCs were attacked by Houthi militants. The strait is a critical chokepoint through which some 4.8 million b/d of crude and refined products are shipped, according to US Energy Information Administration data from 2016, and the bulk of Europe’s crude imports from the Middle East traverse it on their way to the SUMED pipeline or the Suez Canal.

Waiting at Salalah would allow the tankers to resume their journeys promptly, were Saudi Aramco to rescind its ban within the next few days.

Two more Bahri-owned VLCCs, the Abqaiq and the Arsan, appear to have shut off their transponders and have not updated their location through the automatic identification system since July 25 and July 23 respectively, according to cFlow.

An unladen VLCC, the Hilwah, passed through the strait on Sunday and is headed for Ras Tanura on Saudi Arabia’s east coast. It may have been permitted to take this route because it was carrying no cargo.

And the Khafji, another Bahri-owned VLCC that appears to be carrying a cargo loaded on the east coast of Saudi Arabia, appears to be heading for Bab el-Mandeb on its way to Ain Sukhna. It remains unclear whether its voyage will be allowed to continue.

Source: Platts

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