The Oil Kingdom Turns Up the Heat! Saudi Arabia Reportedly "Bidding Top Dollar to Rush-Book Available Tankers"

Latest news on Thursday evening Beijing time shows that Saudi National Shipping Company Bahri is aggressively booking super-large oil tankers at sky-high prices to load crude oil from the Kingdom in the Red Sea, bypassing the shutdown of the Strait of Hormuz.

According to chartering transaction data, Bahri has recently leased at least six Very Large Crude Carriers (VLCCs) heading to the country’s western port of Yanbu to transport crude oil. Many shipowners and brokers believe that the company’s actual booking volume may be even larger, and more deals could surface in the coming days.

(Saudi Arabia is transporting crude oil from the Persian Gulf to Red Sea ports, Source: S&P Global)

Many of the tankers booked by Bahri are priced at 450 WS (Worldscale) points, equivalent to daily rental rates of over $450,000. Before the outbreak of war, industry benchmark rates never exceeded $300,000 per day.

In response to the latest developments, Bahri told the media that the company is continuing operations in accordance with established safety and operational standards, while closely monitoring regional developments. It also added that it cannot comment on commercial matters.

Additionally, vessel tracking data shows that a fleet of tankers extending from Singapore to the Red Sea is neatly heading toward Yanbu to load crude oil. This fleet includes at least 24 tankers, with some charterers still unclear.

Saudi Aramco announced this week that a 1,200-kilometer oil pipeline across the country is expected to reach full capacity within days. This marks the beginning of the Kingdom’s efforts to open an alternative crude export route to bypass the Strait of Hormuz.

The pipeline has a daily capacity of about 7 million barrels, with roughly 2 million barrels supplied to domestic refineries. Shipping analytics platform Vortexa estimates that the current bottleneck is at Yanbu’s loading capacity, which has been measured at less than 2.5 million barrels per day, with a theoretical maximum of around 4 million barrels per day. Before the war, Saudi Aramco exported about 6 million barrels daily through the Strait of Hormuz.

Reports indicate that Saudi oil giant Aramco has asked Asian buyers to nominate loading arrangements for both its main export ports in the Gulf region and alternative ports in the Red Sea when submitting monthly crude oil shipment plans.

Egypt also announced this week that it is ready to assist Saudi Arabia in transporting crude oil via the SUMED (Suez-Mediterranean) pipeline to the Mediterranean. The pipeline’s capacity is reportedly 2.8 million barrels per day.

In addition to Saudi Arabia, the UAE is increasing crude exports through a pipeline connecting its main oil-producing region to the Fujeirah port. Data shows that exports from this terminal have surged to about 1.6 million barrels per day this month, significantly higher than the recent average of around 1.1 million barrels.