Aramco resumes loadings at Ras Tanura

Saudi Aramco has resumed crude exports from its Ras Tanura terminal following a four-month blockade, intensifying market competition despite ongoing geopolitical risks across the region.

WHAT: Saudi Aramco is restarting major crude oil loadings at the Ras Tanura maritime terminal.

WHY: An interim diplomatic agreement has tentatively reopened the Strait of Hormuz to commercial shipping.

WHAT NEXT: Producers will aggressively compete for market share, likely forcing sharp price cuts for August.

Saudi Aramco has resumed crude oil loading operations at its primary Ras Tanura maritime terminal, signalling a return to established supply chains following a near four-month logistical blockade. Shipping data confirms the state-owned energy group commenced loading on June 26, joining a broader regional push by Middle Eastern producers to rapidly export inventory and capitalise on an interim diplomatic agreement between Washington and Tehran.

The resumption at Ras Tanura – the world’s largest oil port, which handled over 5mn barrels per day (bpd) prior to the recent conflict – marks a critical normalisation for global commodity markets.

According to intelligence reviewed by the Financial Times, two Very Large Crude Carriers (VLCCs) operated by Bahri, the Saudi national shipping arm, were actively loading crude on June 26. Each vessel possesses a capacity of around 2mn barrels. The data showed a third VLCC navigating toward the terminal, with a fourth awaiting clearance. Aramco, among the final major Gulf producers to restart direct exports, declined to comment.

Geopolitical risk premium

The return to baseline logistics remains highly exposed to geopolitical risk. The Saudi loadings proceeded despite a severe security incident involving a commercial vessel operated by Taiwan’s Evergreen Marine, struck by an unidentified projectile in the Strait of Hormuz on June 25.

The attack tested the resilience of the interim US-Iran ceasefire, a breakthrough intended to reopen a chokepoint that previously processed 20% of global oil and liquefied natural gas supplies.

Following the maritime strike, the UK Maritime Trade Operations (UKMTO) agency suspended its protective escort operations for transiting merchant vessels. Two US officials told Reuters that Iranian forces had fired upon the cargo ship. In parallel, Iran’s newly established Gulf Strait Authority – a regulatory body formed to assert sovereign administration over maritime traffic – issued a rigid directive. The authority said that any commercial vessels operating outside its designated shipping corridors would not be guaranteed safe passage.

Production and export metrics

The conflict has inflicted structural damage on Saudi Arabia’s export capabilities. LSEG data showed that prior to this week, Aramco last loaded a cargo from Ras Tanura on March 8. The Iranian blockade during the US-Israeli conflict forced the kingdom to divert export infrastructure toward the Red Sea port of Yanbu.

As a precautionary measure, Aramco also suspended operations at its 550,000 bpd domestic refinery located at Ras Tanura.

Consequently, Saudi crude exports plummeted from more than 7mn bpd in February to around 4mn bpd. This logistical paralysis cascaded into broader production metrics. In May, Riyadh formally informed the Organization of the Petroleum Exporting Countries (OPEC) that its crude output had dropped sharply in April to levels not seen since 1990. According to a monthly OPEC report, Saudi production declined by 651,000 bpd last month, falling to 6.316mn bpd – a 42% contraction since February and the lowest output since the Gulf War following Iraq’s invasion of Kuwait.

Riyadh reported to the cartel that its market supply levels stood slightly higher at 6.88mn bpd. The wider OPEC report revealed that total cartel production fell by 1.73mn bpd during April to 18.98mn bpd, with Saudi Arabia absorbing nearly half of that aggregate decline.

Competitive market dynamics

As the strait reopens, a fierce battle for market share is emerging among regional producers, threatening to erode near-term pricing structures. Global Brent prices fell by more than $1 a barrel on June 26. Analysts attribute the bearish sentiment to mounting supply pressure, as physical crude shipments navigating the strait surged this week to their highest levels since hostilities commenced.

Industry executives anticipate that Saudi Aramco may execute sharp reductions to its Official Selling Prices for August loadings as regional competition intensifies. Iraqi strait oil marketer Somo and Qatar have already issued fresh tenders offering spot crude, matching similar moves by Kuwait and the UAE. Tankers transporting UAE crude continued unhindered transits on June 26, with data confirming two laden VLCCs exiting the strait and another heading toward Zirku port.

Iran is also accelerating its export programme after Washington temporarily suspended enforcement of specific sanctions. Shipping intelligence showed two empty VLCCs, the Natsumi and the Halti, entering the Gulf on June 26 to load Iranian crude.

Reuters quoted Aditya Saraswat, Middle East and North Africa research director at Rystad Energy as saying: “2mn barrels a day came back online in three weeks, and the recovery is spread across the region.” The energy consultancy estimates shut-in production across the Gulf fell to 9.6mn bpd in mid-June, down from 11.7mn bpd three weeks prior, expecting a full supply recovery by year-end.

Strategic logistics overview

With the overwhelming majority of Saudi Arabia’s oil reserves held in the Eastern Province or the Rub’ al Khali, the Gulf coast terminals of Ras Tanura and Ju’aymah have historically accounted for most of its crude exports.

Until recently, the East-West Pipeline (EWP) of Petroline, which transports oil from Saudi’s Gulf to Red Sea coasts averaged around 2-2.5mn bpd, with the majority of this feeding Red Sea refineries. Though following a major upgrade project, capacity was increased to 7mn bpd, though sustained throughput at this level had not been tested until the Strait of Hormuz was closed this year.

Saudi crude export capacity is around 14.5mn bpd, significantly above the crude maximum sustainable capacity (MSC) of 12mn bpd. Ras Tanura accounts for around 6.5mn bpd, Ju’aymah around 3–3.5mn bpd and Yanbu roughly 4.5-5mn bpd.

The company set a single-day crude loading record of 15.5mn barrels during Q1 2020 as it emptied storage and shipped volumes held in floating storage to flood the market in an ill-fated effort to win market share from Russia before reining in production and exports as the Covid-19 pandemic decimated demand.

On June 28, Aramco announced that 14 Saudi nationals were killed in a helicopter crash at Ras Tanura, noting that “the relevant authorities have launched a full investigation to determine the cause of the crash”.