One of the main reasons behind the sharp rise in the VLCC supertanker market in recent days is entering a new phase.
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Saudi Arabia has resumed operations of the “East–West Pipeline,” reactivating an overland route that allows millions of barrels of crude oil to be transported from the eastern production areas to the Red Sea. This enables cargoes to avoid passing through the Strait of Hormuz.
Reuters sources familiar with the developments said that the Saudi Aramco pipeline was brought back into operation on September 22, following a suspension caused by drone attacks. The restart process is taking place gradually, and the volumes transported so far remain limited.
For international shipping operators, the key question is how quickly Riyadh will be able to expand oil flows toward the Red Sea.
The “East–West Pipeline” is Saudi Arabia’s main corridor for bypassing Hormuz. The pipeline connects the eastern production regions with Yanbu, giving the country the ability to send large volumes of crude oil to the western coast and then on to global markets.
Its suspension had triggered the opposite situation. With the western route restricted, a larger share of Saudi exports was directed toward terminals in the Persian Gulf.
This shift increased the need for tankers in a region where the number of available vessels had fallen sharply because of the crisis surrounding Hormuz.
Aramco increased shipments from the eastern part of the country, while other logistical solutions were also used, including operations through Sohar in Oman. This created new demand for shuttle tankers and VLCCs at a time when every available supertanker was particularly important for companies seeking to secure transport capacity.
The pressure on the market became clear on September 20, when seven VLCCs loaded around 14 million barrels of Saudi crude oil in a single day.
The reactivation of the “East–West Pipeline” could gradually change this trend. If more barrels are routed toward Yanbu, the theoretical need to send additional cargoes through the Persian Gulf will decrease.
As a result, the exceptional demand for tankers created after the pipeline was shut down could begin to decline progressively.
Despite this, the market is not expected to react immediately. VLCC rates remain supported by the limited number of available vessels, delays, high geopolitical risk and, particularly, the continuing uncertainty in the Strait of Hormuz.
