Crude Oil sells off and takes it all back on Saudi cargoes through Oman

Crude Oil trades near $97.50, which is where it opened, after a drop to $94.50 and a full recovery. Saudi Arabia is offering Asian refiners extra cargoes handed over outside the Strait of Hormuz, and the price treated that as more oil. The five daily closes before this one all landed between $96.50 and $101.00, which is a market that keeps buying and selling the same story.

The cargoes still cross the strait

A ship-to-ship transfer is a hand-off, not a route. Shuttle tankers load Saudi crude at the Gulf terminals, carry it through the Strait of Hormuz, and pass it to the buyer's vessel waiting off Sohar in Oman. What moves is the risk. The Asian refiner's supertanker stays out of the Gulf and a smaller ship makes the transit in its place, and the oil takes the trip it always took.

The volumes say the same thing. Transfers in the Gulf of Oman are running near 2.7 million barrels a day against 1.5 million in August, which is more cargo through the same chokepoint rather than cargo going around it. That chokepoint carried nearly 20 million barrels a day of crude and products in 2025, about a quarter of the world's seaborne oil trade, and no workaround built since February has replaced more than a slice of it. War-risk cover for one Hormuz transit was quoted at 7.5% to 12.5% of a ship's insured value before this month's escalation, against 0.25% before the war. Saudi Arabia has also doubled daily loadings at its Ras Tanura and Juaymah terminals to about two supertankers, roughly 4 million barrels, all of it inside the Gulf. That bill did not fall because Saudi Aramco found somewhere to park a tanker.

Aramco says days and the repair estimates say weeks

The route that genuinely avoids the strait is the East-West pipeline, 1,200 kilometres from the eastern oil fields to Yanbu on the Red Sea and rated at 5 million barrels a day. Houthi drones damaged it and the kingdom shut it on September 11, which is what carried Crude Oil to just above $102.00 on September 15. Regional officials put the repair at three to five weeks. Aramco has said it expects to bring about half the capacity back within days.

Until it runs again, every Saudi barrel sold into Asia has to cross Hormuz, and buyers waiting on the Red Sea route have been told their loadings are late. Some European cargoes due this month were cancelled outright. The arithmetic is not close. The pipeline is rated at 5 million barrels a day, and the extra transfers in the Gulf of Oman since August come to about 1.2 million. The transfers off Oman move the queue rather than the pipeline.

The price has already run this experiment

A meeting on a shipping arrangement for the strait took about four dollars off the price on September 11. Two sessions later Crude Oil made the high of the move just above $102.00. A meeting is not a barrel, a hand-off between two tankers is not a barrel either, and the market needed one session to work that out both times. The same thing happened inside a single session this time, and the low at $94.50 did not last.

Inventories are not the constraint. Commercial crude stocks in the United States fell 600K barrels in the week to September 11, to 423.4 million, and distillate stocks rose. The tightness is in tanker capacity and war-risk insurance in the Gulf, and neither of those is measured in an American tank farm.

What moves the price from here is the pipeline. A restart sends Saudi crude back to the Red Sea and off the strait, which is worth more than every hand-off off Sohar put together. A repair that runs past three weeks leaves those barrels on the water with the insurance bill attached. The Houthis who damaged the pipeline have said Saudi-linked vessels are still targets, so the repaired route delivers to a coast that is also being shot at.

Levels and bias

Resistance: $100.00 capped four sessions running into Wednesday. Each of them traded above it and only one had a close above it. Above that, $102.00 is the high of the move, made on September 15.

Support: $94.50 is the session low and the weakest level since September 10. Beneath it, $93.00 is where that September 10 flush stopped.

Bias: Higher while $94.50 holds, with $100.00 the first objective and $102.00 the second. The daily Stochastic Relative Strength Index (Stoch RSI), a momentum gauge, is near 89 and flat at the top of its range, so the next attempt at $100.00 needs a headline rather than momentum. A daily close below $93.00 ends the bullish case.

WTI daily chart