Introduction 3 - Saudi Aramco resumes oil loading at Ras Tanura port
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By Florence Tan and Si Liu
Singapore, June 26 (Reuters) - Saudi Aramco resumed loading oil at Ras Tanura port on Friday after a nearly four-month halt, shipping data from the London Exchanges Group showed, in a sign that Middle Eastern producers are pressing ahead with plans to boost exports in hopes of returning the sector to pre-war levels.
Loading from the port resumed despite a ship belonging to Taiwan's Evergreen Marine being struck by an unidentified object in the Strait of Hormuz on Thursday.
Middle Eastern producers were preparing to ramp up oil and gas production and exports in the period leading up to the interim agreement between the United States and Iran to end the war and reopen the strait through which one-fifth of the world’s oil and liquefied natural gas supplies passed.
Data showed that two very large crude carriers (VLCCs) belonging to Saudi Arabia's Bahri shipping company were seen being loaded with crude oil at the port, the world's largest oil port, while another waited nearby for loading. Each of these tankers has a capacity of two million barrels of oil.
Saudi Aramco could not be reached for comment outside of business hours.
The UK Maritime Trade Operations (UKMTO) suspended its ship escort operations through the Strait of Hormuz following the attack on the cargo ship, raising renewed concerns about whether the tentative agreement to end the Iran war will hold.
Two US officials told Reuters that Iran fired on the ship, while the Persian Gulf Strait Authority, which Tehran set up to handle requests for ships to pass through the strait, said that ships that do not sail through the routes it has designated cannot be guaranteed safe passage.
Ras Tanura Port
Ras Tanura is located on the eastern coast of the Kingdom on the Arabian Gulf, west of the Strait of Hormuz. Before the conflict, it was used to export more than five million barrels per day of crude oil. Ras Tanura also houses the country's largest domestic oil refinery, with a capacity of 550,000 barrels per day, which was shut down during the war as a precautionary measure.
The data showed that the Saudi oil giant carried out its last loading of shipments from Ras Tanura port on March 8, destined for China, and was forced to divert all its exports to Yanbu port on the Red Sea after Iran closed the Strait of Hormuz during the war with the United States and Israel and prevented ships from entering the Gulf.
The data also shows that the war has caused Saudi crude oil exports to fall to about four million barrels per day over the past three months, after exceeding seven million barrels per day in February.
Oil prices fall amid increased supply
Oil prices fell by more than a dollar a barrel on Friday, after a slight rise following news of the attack on the cargo ship. Prices are under increasing pressure amid rising supplies, with crude oil shipments through the Strait of Hormuz this week reaching their highest level since the conflict began.
Saudi Aramco may sharply reduce its official selling prices for August next week amid intensifying competition among producers.
Iraq's State Oil Marketing Organization (SOMO) and Qatar issued tenders to offer crude oil, following similar moves by Kuwait and the UAE. Iran is also accelerating its exports after Washington temporarily lifted sanctions, with two empty supertankers, the Natsume and Halti, entering the Gulf on Friday to load oil, according to shipping data.
Data showed that tankers loaded with Emirati oil continued to cross the strait on Friday, with two giant tankers leaving and another heading towards the port of Zirku.
“Two million barrels per day have returned to the market in three weeks, and the recovery is expanding across the region,” said Aditya Saraswat, Middle East and North Africa research director at Rystad Energy, in a note, explaining that the supply situation is clearly improving.
Current estimates from the consultancy indicate that production outages across the Gulf region have fallen to 9.6 million barrels per day in mid-June, down from 11.7 million barrels per day just three weeks earlier. The firm anticipates a full recovery in regional supplies by the end of the year.
