Samer Choucair: Aramco Is Reshaping the Flow of Crude Through the Strait of Hormuz
Investment strategist Samer Choucair said Saudi Aramco’s move to offer cargoes of Arab Medium and Arab Heavy crude on a ship-to-ship transfer basis off the coast of Oman, including the Sohar area in the Gulf of Oman, represents a significant logistical development in global energy markets. He said the move reflects an accelerating effort to reshape crude transportation routes from the Gulf amid continued security disruptions affecting maritime traffic in the region.
Choucair explained that using ship-to-ship transfers in Omani waters, a model sometimes referred to as shuttle operations, gives Saudi Arabia an additional route for maintaining its oil export flows and reduces reliance on a single transportation corridor. He noted that the model has previously been used by the UAE and other Gulf countries to address security and logistical challenges affecting tanker movements.
“This step reflects a shift in logistics risk management by the world’s largest oil exporter,” Choucair said. Saudi Arabia, he added, is building a more flexible network that combines pipelines with complex maritime operations rather than relying almost entirely on a single route. This could strengthen its ability to maintain its market share in Asian markets over the long term.
Choucair said global oil markets are currently adapting to a new reality created by security disruptions around the Strait of Hormuz and related maritime routes in the Gulf. Traditional routes alone, he argued, are no longer sufficient to guarantee uninterrupted crude flows, prompting Gulf producers to place greater emphasis on operational alternatives that can preserve supplies even amid elevated geopolitical risks.
The Strait of Hormuz and Global Energy Risk
Choucair noted that the Strait of Hormuz is a vital artery for global energy trade, carrying a significant share of the world’s oil supplies under normal conditions. Any disruption to tanker traffic through the strait can therefore quickly affect crude prices, shipping and insurance costs, refinery economics, inflation, equity markets, and fixed-income assets.
He said security disruptions have already altered tanker movements, prompting several Gulf producers to develop alternative mechanisms based on transferring and redistributing crude through maritime operations in the Gulf of Oman.
The UAE, Iraq, Qatar, and Kuwait have previously used similar operational models, Choucair said, while Saudi Arabia has an additional advantage through its ability to move substantial volumes of crude via the East-West Pipeline to ports on the Red Sea.
Maintaining Gulf oil flows, even through more complex maritime routes and operations, can reduce the risk of a sudden global supply shock, Choucair said. This could help limit sharp increases in crude prices and reduce inflationary pressures that could spill over into bond and equity markets.
Higher Shipping and Insurance Costs
Choucair pointed out that higher insurance and freight costs resulting from increased security risks represent an additional burden for some Asian refiners that rely heavily on Gulf crude. These costs could also affect crude price differentials, refining margins, and final transportation expenses.
Institutional investors, he said, may reassess their allocations in response to these developments, potentially directing part of their capital toward companies involved in large tanker shipping, floating storage, ship-to-ship transfer services, maritime tracking and security, and logistics supporting the global energy trade.
Saudi Arabia’s continued ability to export oil through multiple routes could also reduce the risks investors assign to the Saudi economy, Choucair said, because diversified export routes lower the probability that oil revenues will suffer a sudden disruption caused by problems along a single maritime corridor.
He added that this could have broader implications for sovereign-risk assessments across the region. Continued supply flexibility could lead investors to reassess the risk premium associated with energy and maritime transportation, potentially affecting sovereign borrowing costs and investor appetite for Gulf bonds and other assets.
Oman and the Gulf of Oman Gain Strategic Importance
Choucair said the expansion of ship-to-ship transfers in Omani waters could accelerate investment in ports, logistics infrastructure, storage facilities, and maritime transportation services in Oman.
Such developments could strengthen the Gulf of Oman’s emerging role as a supporting hub for energy trade while also advancing economic and logistical integration among Gulf countries.
He said new opportunities could emerge for companies providing advanced solutions for tanker management, maritime tracking, logistics security, storage, and support services for ship-to-ship operations.
Demand for these services could continue rising if current operations evolve from a temporary response to security disruptions into a more sustainable logistics model.
Investors Reassess the Energy Supply Chain
Investment funds and asset managers, Choucair said, have an opportunity to reassess companies with infrastructure capable of benefiting from this transformation, particularly in shipping, storage, ports, logistics, energy, and marine insurance.
However, he stressed the importance of distinguishing between companies benefiting from increased demand for these services and those facing pressure from higher risk-related costs.
If the current model continues, it could lead to a medium-term repricing of energy risks across the region, with potential consequences for financing costs, insurance premiums, freight rates, and the returns of companies operating throughout the oil supply chain.
The scale of the impact, Choucair said, will depend largely on how long the security disruptions persist and how extensively ship-to-ship transfers are adopted.
More broadly, the changes in crude transportation routes reflect a growing effort among Gulf producers to build more resilient supply chains, ensuring that no single maritime or logistical chokepoint becomes sufficient to interrupt energy flows to global markets.
Choucair concluded that the key challenge ahead will be balancing supply security, operating costs, and geopolitical risk. Gulf producers, he said, are increasingly demonstrating their ability to turn disruptions to maritime traffic into an incentive to redesign and strengthen global energy supply chains.