How is Saudi Aramco trying to maintain crude exports amid disruptions caused by the Iran conflict, Houthi attacks in the Red Sea, and security risks in the Strait of Hormuz—including which grades and offshore locations it is using for ship-to-ship transfers, how this strategy com

Comparison with ADNOC: The approach resembles ADNOC’s established shuttle model: smaller vessels move crude through or around the danger area, then transfer it to larger export tankers outside Hormuz. ADNOC’s operation has reportedly moved more than 100 million barrels and is more mature and systematized; Aramco’s is a newer, selective contingency arrangement rather than a full substitute for normal Ras Tanura exports.

Why Yanbu no longer solves the problem: Saudi Arabia initially diverted substantial crude west across the kingdom through the East-West pipeline to Yanbu. But tankers leaving Yanbu must still navigate the Red Sea and, for Asia-bound cargoes, the Bab el-Mandeb area near Yemen. Houthi threats have caused Saudi-laden tankers to turn back or reroute, and recent Yanbu loadings have been conducted with AIS tracking turned off.

Ras Tanura and India: With the Red Sea route deteriorating, Aramco has resumed loading from terminals inside Hormuz, with VLCC activity observed again around the main Saudi export hub and additional vessels waiting to load. Aramco has handled some September term allocations to Asian customers on an ad-hoc basis rather than through normal scheduling. The available evidence supports weaker delivery reliability and competitive pressure in India, but insufficient evidence in the reviewed reporting to quantify Aramco’s India market-share change precisely.

Prices and inflation: Covert shuttle voyages, rerouting, and some resumed Gulf loadings have helped prevent an even sharper physical-supply shock and therefore tempered the most extreme oil-price and inflation scenarios. But they have not restored normal supply security: Aramco says the conflict has removed more than 2.6 billion barrels from the global market since February and drawn down inventories.

Why September OSP cuts do not make crude cheap: Aramco cut September Arab Light’s Asian price to a six-year low, but the headline OSP is only the crude differential. Buyers still face higher freight, insurance, war-risk premiums, longer voyages or repositioning, tanker scarcity, delays, and the cost/risk of accepting a cargo via Yanbu or an STS arrangement.

Infrastructure constraints: UAE’s Fujairah pipeline bypasses Hormuz geographically but cannot carry all UAE crude exports, so ADNOC still needs tanker shuttles and offshore transfers. Saudi Arabia’s Petroline/East-West system can move barrels to Yanbu, but its effective relief is capped by pipeline and terminal throughput, available ships, and now the Houthi threat at the Red Sea exit; Reuters reported Yanbu volumes near 2 million b/d during the early diversion, versus an estimated 5–6 million b/d Saudi volume needing redirection from Hormuz.

Implications: The region has gained partial workarounds, not secure alternatives. Oil supply is more fragmented; shipping is more opaque because AIS is switched off; tankers, crews, insurers, and coastal infrastructure face greater operational risk; and refiners face uncertain arrival schedules and higher landed costs. Producers can benefit from high crude prices—Aramco reported sharply higher profit amid the disruption—but their gains are offset by constrained export volumes, expensive logistics, price discounts needed to retain buyers, and a greater risk that customers diversify supply.