Gulf Energy Producers Turn to High-Risk Offshore Oil Transfers to Bypass Blockaded Hormuz Strait

Escalating maritime blockades across the Middle East's primary trade corridors have prompted Gulf energy producers to turn to offshore ship-to-ship oil transfers off the coast of Oman. Led by Saudi Arabia, regional exporters are seeking alternative pathways to keep crude moving to global markets amid intensifying regional conflict.

The push toward covert maritime logistics comes after drone strikes carried out by Iran-aligned Houthi forces damaged Saudi Arabia’s crucial East-West pipeline. The 1,200-kilometer (746-mile) infrastructure had served as Riyadh’s primary domestic escape valve, linking major oilfields in the eastern province directly to the western port of Yanbu along the Red Sea.

With the East-West pipeline compromised and the Bab al-Mandeb Strait falling under Houthi control, Saudi Arabia's access to the Red Sea has been effectively severed. At the same time, commercial vessels are increasingly refusing to navigate through the Strait of Hormuz due to heightened military hostility and direct interdictions.

Iran closed the Strait of Hormuz—a maritime gateway that handled nearly one-fifth of pre-war global petroleum supplies—in response to the wider United States-Israel war against Tehran. Iranian authorities have since leveraged control over the waterway during diplomatic negotiations, shutting off the standard export channels relied upon by Gulf Arab producers.

Faced with surging international crude prices and severe transit bottlenecks, the United States and its regional partners have adopted shadow maritime strategies. These methods mirror the covert tactics long employed by Tehran to export oil under sanctions. The United States military has reportedly been providing direct assistance for dozens of these secretive offshore transfer operations since early May.

Two primary maritime locations positioned outside the Hormuz choke point have emerged as central hubs for bypassing the blockade: Oman’s Sohar port and the Port of Fujairah in the United Arab Emirates. Sohar operates as a major deepwater industrial center handling bulk cargo, containers, and petrochemicals, while maintaining overland transport links across the Arabian Peninsula.

Further north on the eastern coast of the UAE, the Port of Fujairah serves as an expansive crude storage and bunkering center. Its open-water anchorage gives international tankers a vital staging area to conduct ship-to-ship energy transfers entirely outside the entrance of the strait.

However, operating near these coastal hubs carries substantial geopolitical risk. Both staging areas sit in close proximity to maritime zones overseen by the Persian Gulf Strait Authority, a newly formed Iranian body created to regulate Hormuz traffic. Iranian forces have already targeted commercial ships accused of using unauthorized southern transit paths near Omani waters.

Ship-to-ship (STS) transfers function as an essential logistical bridge when traditional harbor infrastructure is unavailable. The complex maritime procedure involves mooring two large vessels alongside one another at sea to move liquid hydrocarbons, including crude oil and liquefied natural gas (LNG), directly between cargo tanks.

Executing these operations demands favorable weather conditions and rigorous coordination to avert spills or catastrophic collisions. In typical transfers, a larger vessel holds a steady heading or drops anchor while a maneuvering tanker eases alongside. Crews position heavy pneumatic rubber fenders along the hulls to absorb impact before securing connection lines.

To avoid detection by regional authorities, crews deliberately deactivate their automatic identification system (AIS) transponders during the operation. After safety protocols are completed, cargo pumps transfer the petroleum through heavy-duty hoses while technicians closely track line pressure and changing weather patterns.

Rishi Rajanala, an oil research specialist at LSEG Data & Analytics, noted that following the loss of the East-West pipeline, Saudi Arabia's primary recourse has been moving crude out of Gulf terminals toward STS transfer locations outside the strait, particularly off Sohar. Rajanala cautioned that although regional producers are utilizing this method, total volumes remain constrained by ship availability, steep freight rates, and elevated insurance costs, keeping output well below pre-war levels.

Despite these hurdles, bypass flows have recently expanded. Rahul Choudhary, vice president of upstream research at Rystad Energy, stated that Hormuz-route exports rose past 2 million barrels per day during the first two weeks of the month, representing an increase of roughly 1 million barrels per day compared to August.

Choudhary added that Saudi Aramco is actively marketing supplementary crude cargoes to Asian refiners from Sohar. He observed that Saudi Arabia is likely to lean more heavily on dark tanker networks in the coming period to compensate for export losses at its Red Sea terminal in Yanbu. Independent tracking data indicates that neighboring exporters, including Kuwait and Qatar, have also utilized similar transfer mechanisms.

Despite providing an export lifeline, industry analysts warn that shadow ship-to-ship operations are inherently hazardous and far less efficient than conventional port loadings. The high-risk nature of maneuvering massive vessels in open water increases the danger of mechanical failures, structural damage, and environmental contamination.

These operational risks are amplified because unregulated offshore transfers frequently depend on aging, poorly maintained vessels. Operating with uninspected transfer hoses, switched-off navigation transponders, and an absence of standard maritime insurance, these shadow operations present growing threats to safety across the Gulf's outer shipping lanes.