Pipelines move Gulf crude to new loading ports rather than to buyers, and refilling depleted oil stocks should absorb the extra barrels.

Exports exceed pre-war levels as pipelines change where tankers load

Middle East oil exports averaged more than 24 million barrels per day (bpd) in the week ending 18 October, above the pre-war 23.3 million, according to Kpler, with pipelines that bypass Hormuz carrying a growing share. These pipelines do not deliver crude to buyers; they carry it to another coast, where it is loaded onto tankers. Saudi Arabia’s East-West line can move about 7 million bpd to Yanbu on the Red Sea, about seven Suezmax cargoes a day, although around 2 million bpd feeds local refineries, and the UAE’s line to Fujairah carries up to 1.8 million bpd. About 40% of non-Iranian Gulf crude bypassed Hormuz in September, against 17% before the war, and Saudi Arabia plans to add another 1.2 million bpd within eight weeks.

Restocking should absorb the extra barrels and keep tankers employed

For tankers, the shift changes the trade more than the volume. Europe-bound crude from Yanbu sails north through Suez, where Suezmaxes are the largest tankers that can pass fully laden, and direct loading avoids the ship-to-ship transfers that handle most crude crossing Hormuz. The war risk, however, moves with the cargo: Houthi strikes on Saudi oil facilities and Red Sea tankers, and recent attacks off Fujairah and Sohar, have pushed war-risk premiums at Yanbu to about 3% of vessel value and led some owners to avoid Saudi ports. Rising exports are unlikely to create a surplus that weakens tanker demand. Global oil stocks are about 509 million barrels below pre-war levels, roughly 500 Suezmax cargoes, and restocking, which Chinese refiners are expected to begin in November, should absorb much of the extra supply into 2027 and support Suezmax and Aframax employment.

Sources: AGBI, Bloomberg, IEA, Khaleej Times, Kpler, Reuters, Wall Street Journal & Windward