Saudi Arabia is preparing to restart oil exports from its Ras Tanura terminal, indicating a significant increase in Gulf oil flows and a step towards normalizing Middle East oil shipments. This development follows a US-Iran interim peace deal, which has unlocked vast quantities of oil that were previously stranded due to the closure of the Strait of Hormuz.
The Ras Tanura facility, Saudi Arabia's largest oil refinery and a major export terminal for crude and refined products, had its operations halted on March 2 after a drone strike. Although the refinery itself restarted on March 18, the resumption of exports from its associated terminal marks a crucial return to full pre-conflict operations for Saudi Aramco, the state oil giant that operates the plant.
The broader context reveals a surge in shipping activity through the Strait of Hormuz. At least four Saudi oil supertankers, owned by Bahri, that had been idling in the Indian Ocean for weeks are now heading towards the Gulf of Oman. Additionally, three other Bahri tankers previously stranded in the Persian Gulf have exited the Strait. This movement is part of a larger trend where ships carrying nearly 10 million barrels of oil have either exited or are currently transiting the strait, with more expected in the coming days.
Prior to the peace deal, about 15 million barrels a day of crude shipments from the Persian Gulf were halted, causing oil prices to soar and creating fuel shortages. Saudi Arabia had been diverting significant amounts of oil through Red Sea ports like Yanbu to bypass the blocked Strait of Hormuz. The current increase in traffic, including LNG tankers and vessels chartered by companies like Hyundai Oilbank and Indian Oil Corp, suggests a concerted effort to clear the backlog of approximately 90 million barrels of crude estimated to have been stuck inside the Gulf.
While the immediate focus is on clearing these stranded cargoes, the critical next step will be the booking of new shipments and the willingness of owners to send empty vessels back into the Gulf. This marks the initial phase of what is anticipated to be a months-long process to fully unwind the disruptions to global energy markets caused by the near-closure of the Strait of Hormuz, through which a fifth of the world's oil and natural gas typically flows.
