Gulf producers double down on the oil handoff

QatarEnergy reversed course on where buyers collect the barrels, taking its first crude-loading operation outside the strait. The state-owned producer offered Al-Shaheen and Qatar Marine crude for delivery through ship-to-ship (STS) transfers during the first half of October, according to a tender document seen by Reuters. A previous offer — which required buyers to collect the barrels from Qatari loading terminals inside Hormuz — went unawarded as buyers and shipowners remained reluctant to enter the strait, sources told Reuters.

Iraq, by contrast, is still getting tankers into the Gulf: Loading from its export installations jumped on Monday, with seven vessels collecting Iraqi barrels, Bloomberg reports, citing TankerTrackers. The activity followed Iran’s decision to permit several Iraqi oil tankers to cross Hormuz after requests from Baghdad. On Monday, Somo separately offered September-loading crude from the Basrah Oil Terminal, with buyers responsible for collecting barrels inside the strait.

Other producers are still doubling down on STS: Saudi Aramco has approached Asian buyers for a second consecutive week with offers of Arab Medium and Arab Heavy through STS transfers off Fujairah or Sohar, sources told Reuters. Aramco is using dedicated tankers to move crude from its west coast through Hormuz before transferring it to buyer-nominated vessels outside the strait. Some shuttle vessels have crossed with their tracking systems switched off to reduce their exposure to attacks. Two Aramco shuttle tankers carrying a combined 4 mn barrels completed transfers off Sohar this week, according to Vortexa and Kpler data cited by Reuters.

BACKGROUND- The Gulf oil trade is splitting into two legs: As we previously reported, China’s largest tanker operators — Cosco and CMES — have stopped sending ships through both Hormuz and Bab Al Mandab. Instead, they are collecting Gulf crude at transfer points outside the conflict zone while producers and more risk-tolerant vessels handle the risky first leg.

Iranian threat is already pushing buyers away: At least three Indian refiners and one global energy major plan to stop using vessels on Iran’s new blacklist — including for STS transfers — because of the security risk, four sources told Reuters. One Gulf crude buyer said that it would now be safer to purchase oil on a delivered basis — leaving the producers responsible for the cargo until it reaches its destination — instead of buying free-on-board at an STS location in the Gulf of Oman.

The threat stems from a new blacklist: Iran blacklisted 45 vessels earlier this week — which it accused of violating its Hormuz transit rules, warning penalties on vessels that conduct transfers with listed tankers. The list includes vessels owned or chartered by Aramco and Adnoc that have carried barrels through Hormuz for transfer off Fujairah or Sohar.

But the trade keeps on going: Adnoc and Kuwait Petroleum Corporation (KPC) tentatively chartered four VLCCs to load crude at Fujairah, Reuters cites trade sources. Adnoc selected three tankers for loading this week, while KPC selected at least one for early September, with the option of sailing east or west. Sources said they are expected to transport cargoes originating from inside the Gulf, but Reuters did not specify if crude would be loaded from the Fujairah terminal or through STS transfers.

The spillover: Iran doesn’t need to stop every shuttle tanker to disrupt the model. Threatening vessels receiving their cargoes could shrink the pool of buyers, shipowners, and charterers willing to participate — especially compliance-sensitive companies dependent on mainstream insu’rers or with commercial exposure elsewhere in the Gulf. Enforcement against ships interacting with blacklisted tankers would increase due-diligence requirements and push up freight, ins., and risk premiums.