Oman energy hub reshapes Gulf export routes

Why Oman now underpins Gulf energy flows

Oman is the Gulf’s practical backup route for crude and gas. That matters because it reduces export risk tied to a single chokepoint. The Strait of Hormuz remains critical, but it is no longer the only option for producers moving barrels to Asian buyers.

Saudi Arabia has recently used ship-to-ship transfer loading arrangements off Sohar, Oman, to offer additional crude cargoes to Asian refiners after drone attacks damaged its East-West pipeline to the Red Sea. Reuters reported that Saudi Arabia offered more crude loadings to Asian refiners via ship-to-ship transfer off Oman’s Sohar port after drone attacks damaged its key East-West oil pipeline to the Red Sea. Drone attacks damaged the East-West pipeline and prompted Saudi Arabia to suspend operations on the line, temporarily halting flows to Yanbu. The cargoes — Arab Light, Arab Medium and Arab Heavy — loaded outside the Strait of Hormuz.

The scale matters. Saudi Arabia sold about 60 million barrels of crude from Ras Tanura for September and October loadings via ship-to-ship transfers off Sohar, Oman, according to Reuters. That is not marginal traffic. It is a meaningful export workaround operating at commercial scale.

Context: how Oman built its position

Oman’s geography gives it a structural edge. Its coastline opens to the Arabian Sea and the Indian Ocean. Sohar Port sits on the Gulf of Oman coast, just outside the Strait of Hormuz, near the entrance to the Gulf. The Port of Duqm runs along Oman’s central Arabian Sea coast and sits well outside the Strait entirely.

However, geography alone does not build an energy hub. It needs ports, tanks, pipelines, storage, bunkering and reliable gas systems.

Sohar Port and Freezone form a major industrial and logistics hub. It hosts heavy manufacturing, metals, petrochemicals, food processing and logistics operations. That message covered the full chain — from upstream supply through transport, handling and export. It was a commercial pitch backed by live assets.

Duqm adds a second maritime axis. It reduces concentration on Sohar and provides a distinct outlet on the Arabian Sea. OQ Gas Networks is advancing the Duqm Growth pipeline, a 13‑kilometre, 32‑inch gas pipeline in southeast Oman, designed to augment gas supplies to the Port of Duqm area and its expanding industrial cluster. That cluster is expanding rapidly. Gas connectivity is a precondition for its growth.

This is also a policy story. Oman is not retreating from hydrocarbons. It is using hydrocarbon revenues to fund parallel infrastructure. That approach suits institutional capital and project lenders who prefer assets with clear tariff, utility or throughput profiles.

What does the Saudi crude rerouting mean for investors?

The crude rerouting is the clearest live signal investors have received. Saudi Arabia offered Arab Light, Arab Medium and Arab Heavy cargoes to Asian refiners via ship-to-ship transfer off Sohar. Shuttle tankers moved crude from Ras Tanura inside the Strait to the transfer point near Sohar outside it. Reuters confirmed the mechanism and the volumes.

At 60 million barrels across two months, Oman was absorbing a significant share of displaced Saudi export flow. That volume signals that Oman’s port and anchorage infrastructure can handle real pressure — not just test runs or spot cargoes.

The Marsa LNG project at Sohar adds the gas dimension. The Oman Observer reported in September 2026 that the 165,000‑cubic‑metre LNG storage tank at Sohar Port, part of the Marsa LNG project, was nearing completion. The Marsa LNG complex is designed for LNG production capacity of around one million tonnes per year. It is designed to make Sohar a major regional LNG bunkering hub. By end‑June 2026, the Marsa LNG project was more than 55 per cent complete and remained on track for a first‑quarter 2028 start‑up.

The ownership structure adds credibility. TotalEnergies holds 80 per cent of Marsa LNG, while OQ Exploration and Production (OQEP) holds the remaining 20 per cent. That structure links Oman’s port strategy to a global energy major with proven LNG project management and offtake relationships across Asia.

The gas network numbers reinforce the picture. OQ Gas Networks expects its pipeline network to expand from 4,368 kilometres at end‑2025 to 4,717 kilometres by 2027. Total gas transportation capacity is projected to rise from 76.3 billion standard cubic metres in 2025 to 80.3 billion standard cubic metres by 2027.

More kilometres of pipe and more capacity tend to support more stable logistics value. They also strengthen industrial sites that depend on uninterrupted gas supply — exactly the profile that long-tenor infrastructure investors seek.

Sohar’s LNG build-out matters for shipping too. The Marsa LNG development includes marine LNG bunkering facilities designed to serve vessels in regional waters, positioning Sohar as a major bunkering hub. Bunkering creates recurring demand. It also ties Oman more deeply into vessel routing and regional maritime services — a virtuous cycle for port revenues and ancillary logistics businesses.

Stakeholders: who gains and who is exposed

Saudi Arabia is the primary near-term beneficiary. Ship‑to‑ship transfer points off Sohar can absorb pressure when the East‑West pipeline is disrupted, as recent Reuters reporting has demonstrated. That gives Saudi producers more optionality for Asian sales without routing through the Red Sea or the Strait of Hormuz simultaneously.

Asian refiners also gain. Additional crude supply via Sohar — a loading point outside the Strait of Hormuz — can improve delivery continuity and reduce concentration risk. The trade-off is additional handling steps and freight complexity. Resilience costs something. For refiners running complex cracking units on specific grades, that trade-off is worthwhile.

TotalEnergies and OQ Exploration and Production (OQEP) are direct stakeholders in Marsa LNG. The project’s planned one‑million‑tonne‑per‑year LNG capacity, 165,000‑cubic‑metre storage tank and dedicated bunkering infrastructure create a strategic asset with both domestic and regional use cases. For TotalEnergies, it extends its LNG bunkering footprint into a corridor that handles growing volumes of maritime traffic.

OQ Gas Networks, as Oman’s exclusive owner and operator of the national gas transmission network, stands to gain from every new industrial connection. Its expansion projects — including the Fahud‑Sohar Loop Line, the Budoor‑Tayseer pipeline and the Duqm Growth pipeline — are designed to serve industrial and logistics hubs with rising energy demand. Each new kilometre adds regulated throughput and strengthens the network’s strategic position.

Ports matter as much as pipelines. Sohar’s value comes from its combination of deep-water access, industrial handling capacity and proximity to the Hormuz chokepoint — close enough to absorb diverted Gulf flows, far enough to sit outside the Strait. Duqm provides a second maritime axis that lowers dependence on any single coastal node.

Outlook: three signals to watch

The next phase is about scale, not headlines. If Sohar keeps absorbing crude transfers, its strategic value rises further. If Marsa LNG stays on its first‑quarter 2028 start‑up track, Sohar gains a second pillar through LNG bunkering. If OQ Gas Networks completes its pipeline expansions on schedule, Oman’s inland and coastal nodes become harder to bypass in any regional routing calculation.

However, volumes will still move with tanker availability, freight economics and customer demand. The routing response can be swift — Reuters’ reporting showed that clearly — but it remains operationally constrained by shuttle tanker capacity and anchorage logistics. Oman’s role will therefore expand unevenly, not in a straight line.

Three signals deserve close attention. First, watch whether Saudi Arabia continues using Sohar beyond short-term pipeline disruptions — sustained use would confirm the route’s permanent place in Gulf export architecture. Second, watch Marsa LNG’s commissioning milestones through 2027 and into 2028, particularly whether the first-quarter target holds. Third, watch whether OQ Gas Networks’ network expansion lifts gas flows into Sohar, Duqm and adjacent industrial zones on the published 2027 timeline.

The sharper question for institutional investors is not whether Oman matters — the roughly 60‑million‑barrel crude rerouting via Sohar answered that — but how quickly the infrastructure can scale to match demand. Ports, pipelines and storage tanks take years to build. Oman has been building them. That lead time is now converting into commercial advantage, and the gap between Oman and alternative routing options is widening with each passing quarter.

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