17 September 2026
Executive Summary
Saudi Arabia has begun expanding an alternative oil-export route through Oman, easing some of the immediate supply pressure created by damage to its East-West pipeline and the suspension of loadings at Yanbu.
Saudi Aramco is offering additional crude to Asian customers using ship-to-ship transfers off Oman’s Sohar port.
The location is strategically important because Sohar sits outside the Strait of Hormuz.
Saudi Arabia is offering grades including:
- Arab Light.
- Arab Medium.
- Arab Heavy.
Saudi crude loadings from Ras Tanura and Juaymah inside the Gulf have also increased sharply to approximately 4 million barrels per day.
The development follows Saudi cancellations of some European cargoes and delays to Asian deliveries after drone attacks damaged pumping stations on the East-West pipeline.
Oil markets have responded.
Brent crude fell below approximately $105 per barrel early Thursday, after reaching four-month highs earlier in the week.
The Saudi pipeline remains damaged and the repair timetable remains uncertain.
But the new arrangements represent a meaningful improvement in the immediate supply picture.
Risk management should recognise when contingency measures are working as well as when risks are deteriorating.
UK Impact
The development may reduce some immediate upward pressure on:
- Oil.
- Diesel.
- Petrol.
- Aviation fuel.
- Marine bunkers.
- Freight costs.
It does not mean those costs will return quickly to pre-conflict levels.
Physical European crude remains expensive and wider Middle Eastern security risks persist.
But businesses should avoid making procurement decisions based solely upon the assumption that every new development will push energy prices higher.
Volatility can work in both directions.
Global Impact
Saudi Arabia’s response demonstrates the value of flexible logistics.
The East-West pipeline normally allows Saudi crude to bypass Hormuz and reach Yanbu on the Red Sea.
When that route was damaged, Saudi Arabia used a combination of:
- Gulf export terminals.
- Additional tanker loading.
- Ship-to-ship transfers.
- Omani infrastructure.
to maintain more supply than initially feared.
That does not eliminate the underlying risks.
Hormuz remains disrupted.
The East-West pipeline remains damaged.
Yanbu loadings remain affected.
Regional military activity continues.
But supply chains rarely operate in binary states of either “normal” or “closed”.
Alternative logistics can preserve partial capacity.
Our View
The development provides an equally useful risk-management lesson.
Businesses should ask:
- Do our own continuity plans contain alternative routes?
- Have those routes actually been tested?
- Are alternative ports available?
- Are alternative carriers contracted?
- Can cargo be transferred between transport modes?
- Are customs arrangements already established?
- Can alternative suppliers increase production?
- Are emergency contracts pre-negotiated?
- Who has authority to activate contingency arrangements?
- How quickly can they be activated?
- Are insurance arrangements valid on alternative routes?
- Do alternative routes create different political risks?
- What additional costs would arise?
- Is sufficient working capital available?
- Have contingency routes been physically tested rather than simply documented?
Saudi Arabia’s response illustrates an important distinction:
redundancy is valuable only when it can actually be activated.
A contingency route written into a business-continuity plan is not the same as one that has been tested, contracted and can operate under pressure.
Risk Indicator: ELEVATED – OIL, LOGISTICS & SUPPLY-CHAIN RESILIENCE
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The information contained within these Market Alerts is provided for general market awareness and informational purposes only. It does not constitute financial, legal, investment, regulatory or insurance advice. Whilst every effort has been made to ensure accuracy at the time of publication using multiple reputable and independently verified sources, geopolitical events, legislation, regulation and market conditions may change rapidly. Readers should obtain appropriate professional advice before acting upon any information contained herein.
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