Key facts
- VLCC rates hit a record $1.27 million daily.
- Oman's ship-to-ship transfer capacity is maxed out.
- Saudi Arabia's East-West Pipeline was shut down by drone strikes.
- The pipeline shutdown forced Saudi Arabia to divert crude oil exports.
- Houthi forces threaten the Bab el-Mandeb Strait, a key energy corridor.
Very large crude carrier (VLCC) rates surged to a record $1.27 million per day as Oman's ship-to-ship transfer capacity maxed out due to Saudi Arabia diverting crude oil exports. The kingdom's East-West Pipeline, also known as Petroline, was shut down by drone strikes launched from Iraq on September 11, limiting Red Sea exports. The attack took an estimated 4-5 million barrels a day of capacity offline, significantly reducing Saudi crude loadings. Saudi Aramco has since restarted the pipeline, with pumping resuming at reduced rates and targeting around 4 million barrels per day. Before the attack, the pipeline had been moving approximately 5.5 million barrels per day, with about 4.5 million barrels per day destined for export from Yanbu. Repairs to the pipeline's pumping infrastructure are ongoing, with estimates for full restoration ranging from four to six weeks. Meanwhile, Iran-aligned Houthi forces have advanced along Yemen's Red Sea coast, increasing threats to the Bab el-Mandeb Strait, another vital energy corridor. Satellite images showed the highest tanker count at Saudi Gulf export terminals since at least June over the weekend, while traffic through the Strait of Hormuz fell significantly.