Oman bypasses Hormuz's “fuel supply”: plans to buy two supertankers as floating warehouses, doubling oil storage at Dukoum Port to 10 million barrels in three years

The Zhitong Finance App learned that the Strait of Hormuz continues to be blocked by the war in the Middle East. This oil storage capacity outside the global energy hub is becoming a hard currency. Oman, which guards the entrance to the Arabian Sea, is playing a game of chess using its strategic location, which is naturally located outside the strait. Oman plans to more than double the oil storage capacity of a port outside the Strait of Hormuz, hoping to take advantage of its strategic location as energy producers in the region find ways to bypass this highly competitive waterway.

Ashraf Mamali, CEO of the national energy company OQ SAOC, said in an interview that the company is evaluating the purchase of two very large tankers (VLCCs) and leasing them as floating oil storage facilities at the port of Dukoum — each can hold 2 million barrels, and the two vessels total 4 million barrels; it will take about six months to install after purchase, and the final decision will be made within the year. According to Mamali, OQ needs to balance the high cost of buying a ship with the potential benefits of the oil storage business before making a decision.

The onshore line is expanding simultaneously: Ducum's crude oil storage tank capacity plans to increase from the current 5 million barrels to 10 million barrels within three years, with a long-term target of about 40 million barrels. Dukum faces the Arabian Sea. Customers can completely bypass risky waters to pick up goods here and not rely on a high-risk voyage through Hormuz — if you put oil in the strait, you can't ship it; if you put it outside the strait, it can be loaded and delivered at any time.

Gulf oil producing countries detour puzzle

Dukum's strategic value is being repriced throughout the Gulf region. According to reports, oil producing countries such as the United Arab Emirates and Saudi Arabia have shut down ship transponders (AIS) to allow tankers to venture through the strait in a low-key manner — once the transponder is off, the ship will no longer be broadcast to the outside world to reduce the risk of exposure in the event of an attack. At the same time, countries are looking for alternative pipeline routes: Saudi Aramco CEO Amin Nasser said that the company is looking for alternatives to the traditional Red Sea and Persian Gulf export routes; the UAE is planning to add additional pipelines to Fujairah, an oil hub located on the east coast of the UAE facing the Gulf of Oman, which is currently the most mature “export out of the strait” in the Gulf region.

Dukoum itself still harbors a larger imagination: the port has long been viewed as a potential end point for the trans-Arabian Peninsula oil pipeline. In theory, crude oil from Saudi Arabia, Kuwait and other oil fields can be shipped directly to the sea — even though such projects have never been implemented. After the blockade of Hormuz, Saudi Arabia and Kuwait both said they were exploring pipeline alternatives, but did not disclose specific plans. When asked about this matter, Mamali's statement was open and cautious: “On the pipeline side, the message from Oman is that of course we are open, but these are still in the very early stages of intergovernmental discussions.” He says he doesn't know the details. Dukoum also owns a refinery built in a joint venture with the Kuwait National Petroleum Company, which is tantamount to being stuck in position ahead of schedule.

The timing is also right. The war has increased shipping risks and forced ships to detour to avoid fireworks, and daily VLCC rents on the key route from the Persian Gulf to China have soared to more than 1 million US dollars. VLCC (very large crude oil carrier) is the type of tanker with the largest fuel capacity today. A single ship can carry about 2 million barrels of crude oil — in other words, the capacity of each floating silo planned by Dukum is equivalent to the main cargo volume sold to Asia in the Middle East. As a result, oil tankers have become one of the most expensive assets in this sea area: buying two as floating warehouses is both an oil storage and an asset.

According to previous reports, demand for tankers from Middle Eastern oil producers has pushed the sales price of both new ships and used VLCCs to a record high; Abu Dhabi National Petroleum Corporation (ADNOC) bought 6 supertankers and 5 large gas carriers at a total price of 1.3 billion US dollars and put them into use immediately after delivery; ADNOC and KOC also began using shuttle tankers to transfer crude oil to tankers waiting outside the Gulf of Oman. At a time when “rushing transportation within the strait and storing oil outside the strait” are becoming popular in parallel, the expansion of oil storage in Oman is at the same pace.

For the oil market, inventory outside the strait also has another meaning: goods are stored in Dukoum, and buyers can pick up the boat for delivery at any time, without having to pay a higher risk premium for a voyage that can be interrupted at any time. This is exactly what Oman needs to eat from this expansion of reserves.

Another game of chess: Upstream Africa and the 2027 refining and chemical listing

In addition to oil storage, Mamali also revealed OQ's expansion roadmap. In Africa, the company is seeking to obtain oil and gas exploration and even potential mining rights in countries such as Angola, Algeria, and Libya: in Angola, OQ is negotiating a natural gas exploration agreement for offshore block 24, hoping to finalize it next year before evaluating other regions; the company is participating in the bidding for exploration rights in Algeria and discussing similar projects in Libya. Mamari said OQ hopes to fully expand its presence in Africa in the upstream, downstream, trade and renewable energy sectors.

On the capital market side, the company is evaluating plans to sell shares in its refining and petrochemical business, which may be brought to market as soon as 2027; Mamari has made it clear that the company has no IPO plans next year.

Put a few lines together: two VLCC floating warehouses are fast chess; doubling storage tanks in three years is slow chess; the end point of the pipeline is long-term; and the listing of African equity and refining is the second growth curve for this national energy company outside of its main business. Others took risks to grab crude oil in the strait, and Oman quietly expanded warehouses outside the strait — from 5 million barrels to 40 million barrels, from storage tanks to oil tankers, from refineries to pipelines that have not yet landed, every step of Dukum is taking a seat for the “post-Hormuz era.”