Crude transfers off Oman are drawing tanker capacity towards the Gulf and raising freight costs as China depletes its recent stock build, according to Signal Group analysis published by Hellenic Shipping News. Loading outside the Strait of Hormuz remained cheaper for Chinese buyers than sourcing from West Africa, despite sharply higher earnings for vessels serving the region.
China imported 9.03 million barrels per day of crude in September, little changed from August, while refinery throughput reached 13.99 million bpd, its highest since March. The analysis put the net stock draw, after crude exports, at 600,000 bpd. Just 31 million barrels remained of the 121.5 million barrels accumulated by April. At the May-September drawdown rate, that increment would disappear by late November, rather than exhausting China's overall stockpile.
The report described two major shifts in Gulf export logistics following the closure of Hormuz. Saudi shipments through the Red Sea initially increased, but an August attack on the East-West pipeline pushed activity towards tanker relays. Crude crossing the strait on smaller stages of the voyage was transferred onto VLCCs off Fujairah, Khor Fakkan and Sohar. That transfer trade reached about 5 million bpd in September, up from almost nothing in February.
Voyage length helps explain why headline tanker earnings do not translate directly into buyers' freight bills. For a roughly 2 million-barrel cargo bound for Ningbo in September, the analysis estimated freight at $26 a barrel from Ras Tanura, inside the strait, against $17.50 from West Africa and $15 from Mina al Fahal in Oman. By October, those estimates had risen to $34, $28 and $19 respectively, preserving Oman's cost advantage.
The relay system nevertheless requires two vessels for each transferred cargo and adds waiting time. Freight on the Gulf of Oman-to-China TD34 route tripled month on month in September. Meanwhile, VLCCs ballasting towards West Africa, Brazil and the US Gulf fell from about 85 a week in early September to 50-54 from mid-October, according to the analysis. West Africa-to-China earnings reached $667,000 a day as Atlantic availability tightened.
China continued securing Atlantic supplies, with 19 VLCCs booked from Brazil and West Africa during the final ten days of October, mostly for November loading. Signal Group said the capacity of the Oman transfer network would shape replenishment: continued flows would attract more tonnage east, while disruption could force deeper inventory withdrawals or longer-haul purchases. Brent near $100 since early September was also expected to slow restocking.