Saudi Arabia Diverts Export Routes, Oil Prices Fall!
Oil prices fell after Saudi Arabia diverted a portion of its crude oil exports through the Strait of Hormuz to compensate for the closure of a major oil pipeline. This move has alleviated market concerns regarding potential disruptions to the global supply.
Quoting CNBC International, Brent crude, the international benchmark, fell by US$1.01 to close at US$104.82 per barrel in Thursday’s trading. US West Texas Intermediate (WTI) crude dropped by 52 cents to close at US$101.91.
Meanwhile, US crude prices rose by almost 2% throughout this week and have increased by more than 18% this month.
According to Reuters sources, Saudi Arabia is providing additional crude oil cargoes to refineries in Asia through ship-to-ship transfers outside the Strait of Hormuz, near the port of Sohar in Oman. Vessels transport crude oil through the Strait of Hormuz and then load it onto tankers waiting outside the strait, allowing these ships to avoid the risk of Iranian attacks while sailing into the Gulf.
Matt Smith, Director of Commodity Research at Kpler, stated that the loading of Saudi Arabian crude oil at East Middle East ports has seen an increase throughout this month. Additionally, the volume of ship-to-ship oil transfers in the Gulf of Oman has risen to 2.7 million barrels per day (bpd), compared to 1.5 million bpd in August 2026.
“However, it is difficult to determine whether Saudi Arabia or other Gulf nations are behind the transfer,” he noted on Friday (18/9/2026).
US Energy Secretary Chris Wright told CNBC on Tuesday that Saudi Arabia has taken swift action to export more oil through the Strait of Hormuz with the assistance of the US military.
Other Reuters sources mentioned that earlier this week, Saudi Arabia halted crude oil loading at the Red Sea export terminal in Yanbu and cancelled several shipments to customers in Europe. Yanbu has been a primary route for Saudi oil exports since Iran began attacking tankers in the Strait of Hormuz, following US and Israeli attacks on the country in late February.
Saudi Arabia closed the East-West oil pipeline last weekend after the pipeline sustained damage due to drone attacks launched from Iraq. The US Energy Secretary told CNBC that the disruption is brief and temporary, expected to last only a few days.
However, independent analysts warned that repairing the damage could take weeks or even months. Rapidan Energy estimates that Saudi Arabian crude exports will decrease by 400,000 barrels per day this month due to the pipeline disruption. However, the decline in shipments from Yanbu is expected to be partially offset by increased exports through the Strait of Hormuz.
“The risk remains skewed towards a larger disruption if the pipeline outage continues beyond September or if Iran, the Houthis, or other proxy groups escalate attacks,” the analyst added.