Saudi Arabia is increasingly relying on covert ship-to-ship oil transfers off the coast of Oman following disruptions to its critical East-West pipeline, which previously allowed Riyadh to circumvent the strategically vital Strait of Hormuz. The attacks, attributed to Iran-aligned Houthis, have forced Saudi officials to seek alternative export routes as commercial vessels continue to refuse passage through the threatened waterway.
The crude is now being transported to Sohar, a deepwater port in Oman located just outside the strait. There, oil is moved from Saudi tankers to other vessels in what experts describe as a growing “shadow” tactic reminiscent of methods long used by Iran to evade sanctions. This escalation comes as the Strait of Hormuz, through which nearly 20% of global pre-war energy once flowed, has been effectively closed by Iranian authorities in response to the US-Israeli military campaign against Iran.
Reports indicate that US military assets, including guided-missile destroyers, have reportedly assisted in these secretive operations starting in early May to ensure Gulf energy exports remain flowing. The Port of Sohar and the UAE’s Fujairah port have emerged as key hubs for these maneuvers, offering access to open-ocean anchorages away from the strict controls enforced by the newly established Iranian Persian Gulf Strait Authority.
Ship-to-ship transfers involve moving cargo directly between vessels at sea, a process requiring meticulous coordination to avoid collisions and spills. To maintain operational secrecy and avoid detection, participating ships often deactivate their Automatic Identification System (AIS) trackers. Despite these precautions, experts warn that such transfers are inherently dangerous, frequently involving aging vessels, uninspected hoses, and a lack of standard insurance coverage.
According to Rishi Rajanala, a research specialist at LSEG Data & Analytics, Gulf producers had already been moving partial exports via these methods, but volumes were previously constrained by tanker availability and insurance costs. However, data from Rystad Energy shows that exports via the Hormuz route have edged higher than 2 million barrels per day in early September, up from approximately 1 million barrels per day in August.
Kuwait and Qatar have also been identified by independent trackers as occasionally utilizing similar tactics to transit cargoes past the strait. Meanwhile, TankerTrackers reported a 56% month-over-month increase in ship-to-ship exchange volume, citing over 7.15 million barrels per day moved in the past two weeks.
The financial implications of these high-risk maneuvers are significant. Oscar Seikaly, CEO of NSI Insurance Group, noted that traditional insurers find ship-to-ship transfers particularly complicated due to potential pollution, collision, and war-risk liabilities. Consequently, most national oil companies involved rely on sovereign-backed self-insurance arrangements rather than commercial policies, meaning producing countries bear the brunt of the risk during wartime disruptions.
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