Full Breakdown
Saudi Oil Reroutes via Ship-to-Ship Transfers off Oman and the UAE
By Drooid · · How we work
Disruption of Saudi Exports and the Shift to Offshore Transfers
Drone attacks by Iran-aligned Houthis have damaged Saudi Arabia’s 1,200 km East-West pipeline, which previously linked eastern oil fields to the Red Sea port of Yanbu. With the pipeline inoperable and commercial vessels avoiding the Strait of Hormuz, Riyadh has turned to ship-to-ship (STS) transfers at offshore anchorage points near Oman’s Sohar port and the United Arab Emirates’ Port of Fujairah. The United States military is reported to be assisting these “dark” tanker operations to keep Gulf oil flowing.
Mechanics of Ship-to-Ship Transfers
STS transfers involve two vessels positioned side-by-side, often with the larger ship maintaining a steady course or anchored while the second vessel approaches. Pneumatic rubber fenders are deployed to protect hulls, and AIS tracking is typically switched off to conceal the operation. Once aligned, pumps move crude or LNG through connected hoses under continuous pressure monitoring, with safety checks performed before cargo movement begins.
Volume Growth and Operational Risks
Rishi Rajanala, research specialist in Oil Americas at LSEG Data & Analytics, notes that Saudi exporters are now loading crude at Sohar to meet Asian refinery demand, though volumes remain below pre-war levels because of tanker availability and insurance constraints. Rahul Choudhary, VP Upstream Research at Rystad Energy, reports that exports via the Hormuz route have risen to over 2 million barrels per day in the first two weeks of the current month—about 1 million barrels per day higher than in August. TankerTrackers, a monitoring platform, recorded 7.15 million barrels per day exchanged through STS transfers over the past 14 days, a 56 percent increase from the previous month. Experts warn that many of the vessels used are aging, with uninspected hoses and limited hull maintenance, raising the likelihood of spills or collisions.
Insurance and Liability Challenges
Oscar Seikaly, CEO of the NSI Insurance Group, explains that traditional insurers view STS transfers as “particularly complicated” because losses could involve vessel damage, pollution, collision liabilities, cargo loss, and war-risk exposure. Underwriters may impose strict navigational warranties, security conditions, and additional war premiums, or decline coverage altogether. Consequently, most oil moved in these operations is backed by sovereign self-insurance or private markets that are willing to assume higher risk during wartime disruptions.