Saudi Arabia has sold about 60 million barrels of crude from its Ras Tanura export terminal inside the Strait of Hormuz for loading through ship-to-ship transfers at Oman’s Sohar port this month and next, according to multiple trade sources cited by Reuters, providing Asian refiners with an alternative route for securing Saudi oil amid disruptions to the kingdom’s normal export flows.

The shipments indicate that Saudi Aramco is maintaining a significant flow of crude from its Gulf terminals despite the disruption to exports from its Red Sea port of Yanbu following an attack on the East-West pipeline.

Aramco’s Gulf exports have recovered to an average of about 1 million to 1.5 million barrels per day, according to the sources. That is broadly in line with, or slightly above, August levels and has helped ease pressure in global oil markets by replacing some of the barrels affected by the slowdown at Yanbu.

Chinese and South Korean refiners are among the largest buyers of the spot cargoes, while additional supplies are heading to India and Japan, the sources said.

The increased availability of Saudi crude contributed to a decline in oil prices on Friday, with global futures falling by more than $1 a barrel. Traders were also responding to reports that Saudi Arabia could restore about half of the East-West pipeline’s capacity within days and was offering additional crude cargoes to Asian refiners through ship-to-ship transfers near Sohar.

The developments point to a rapid adjustment in the physical oil market as producers, refiners and shipping companies seek alternative ways to move crude around infrastructure and security constraints.

Sohar Becomes An Important Transfer Point

Sohar, outside the Strait of Hormuz, has emerged as an important point for transferring Saudi crude from larger Gulf shipments onto vessels bound for Asian customers.

The arrangement allows Saudi oil to continue reaching major Asian markets even as the disruption to the kingdom’s pipeline infrastructure changes the normal balance between its Red Sea and Gulf export routes.

Asia is the main market for Saudi crude, making the additional Gulf supplies crucial for refiners in China, South Korea, India and Japan. Japan’s refiners, in particular, say they have been able to maintain adequate supplies through November because of the alternative shipping arrangements.

The Petroleum Association of Japan said Friday that the country’s oil refiners had secured sufficient crude supplies through November, pointing to ship-to-ship transfers taking place outside the Gulf.

“In some cases, oil passes through the Strait of Hormuz at Saudi Arabia’s risk before being transferred to us outside the Gulf. For that reason, supplies from Saudi Arabia have not ceased entirely,” PAJ President Shunichi Kito said in Tokyo.

The comments reveal the logistical complexity of maintaining Saudi crude flows under current conditions. Oil can still leave Ras Tanura, but the route to Asian refiners involves additional transfers and exposure to risks around the Strait of Hormuz.

Higher shipping costs add to the disruption

The alternative supply routes are helping prevent a larger loss of Saudi crude from the Asian market, but they are also increasing transportation costs.

Supertanker freight rates reached record levels this week as demand for alternative crude routes increased. The rate to charter a very large crude carrier capable of carrying about 2 million barrels from Fujairah to Asia in early October reached 800 Worldscale, according to a shipbroking firm.

Higher freight costs could become an important part of the oil-market equation if the alternative shipping arrangements continue for an extended period. Even where crude remains physically available, more expensive and complicated transportation can raise the delivered cost for refiners.

The immediate market response, however, has focused on the additional Saudi barrels reaching Asia and the prospect of restoring part of the East-West pipeline’s capacity.

The reported 60 million barrels of crude scheduled for ship-to-ship loading in September and October represent a substantial flow of oil into a market that has been concerned about supply disruptions. Combined with the potential restoration of the pipeline, the additional shipments have reduced some of the immediate supply concerns that had pushed oil prices higher.

But the situation remains dependent on the security of Saudi export infrastructure and shipping routes. For Asian refiners, the ability to receive Saudi crude through Sohar provides an alternative channel, but the arrangement also demonstrates how disruptions to one part of the world’s oil infrastructure can quickly alter shipping patterns, freight costs and the pricing of crude across the region.

The Bank of Japan raised its policy rate by 25 basis points to 1.25% on Friday, taking borrowing costs to their highest level since 1995, but a split decision and limited guidance on further tightening sent the yen sharply lower.

The increase was widely anticipated, with nearly 90% of economists surveyed by CNBC expecting the BOJ to deliver a quarter-point hike. The decision nevertheless unsettled currency markets because two of the central bank’s nine policymakers voted against it, raising questions about how much support there is within the board for maintaining an accelerated pace of monetary tightening.

The vote was 7-2, with Toichiro Asada and Ayano Sato dissenting. Both were appointed by Prime Minister Sanae Takaichi earlier this year and are viewed as reflationists. Asada argued that core inflation was below the BOJ’s 2% target and that the economic situation might not be sufficiently strong to justify another increase, while Sato said economic and price developments had not accelerated substantially from their previous pace.

The hike marks a faster pace of normalization for the BOJ since it began dismantling its long-running ultra-loose monetary policy in March 2024. The latest increase came only three months after the previous hike, compared with a six-month interval before that.

In its policy statement, the BOJ said it acted because of the risk that inflation could deviate upward beyond its 2% target. The central bank said it wants underlying inflation to stabilize at around 2%, arguing that a sustained overshoot could eventually have adverse consequences for the Japanese economy.

The decision comes against a complicated backdrop for Japan’s policymakers. Inflation remains close to the BOJ’s target, while the yen continues to trade at historically weak levels against the dollar. Japan and the United States have also undertaken coordinated action aimed at supporting the currency.

Yet the immediate market reaction was the opposite of what a rate increase might normally imply.

The dollar climbed 1.2% against the yen to 157.84, its highest level in two weeks. The move put the Japanese currency on track for its biggest daily decline against the dollar since December and its strongest weekly loss since September 2024.

“They’ve just clearly underwhelmed versus expectations here,” said Ray Attrill, head of FX strategy at National Australia Bank in Sydney.

“And I think that one of the more staggering aspects of it was that they couldn’t even get the unanimous vote for that,” he added. “That really raised eyebrows in the market.”

The yen had strengthened sharply earlier in September, reaching its strongest level since February as investors increased bets that the BOJ would embark on a series of rate increases. Friday’s decision has complicated those expectations.

The issue for currency traders was not the 25-basis-point increase itself, which had been largely priced in, but what the decision said about the path ahead.

“The statement offered little additional hawkish guidance to support bullish Japanese yen positions,” said Frantisek Taborsky, a currency strategist at ING.

“The dissent from [Toichiro] Asada and [Ayano] Sato points to resistance against the fastest pace of rate increases in more than three decades and suggests they may increasingly act as a brake on further tightening,” he said.

The market reaction also highlights the difficulty facing BOJ Governor Kazuo Ueda as the central bank tries to balance inflation risks against concerns about economic growth and financial conditions.

Japan’s core inflation remained close to the BOJ’s target in August. The core measure stood at 1.7%, down from 1.8% in July, while headline inflation was 1.9%. Asada specifically pointed to the core reading in arguing for a pause.

The BOJ’s decision therefore leaves policymakers confronting two competing pressures. Inflation is sufficiently persistent for the central bank to worry about an upside deviation from its target, but some policymakers believe the underlying economy and price trends do not yet justify a faster tightening cycle.

For the yen, the uncertainty is growing larger because interest-rate expectations have become an important driver of the currency. Investors had been betting that Japan’s move away from decades of ultra-low rates would narrow the interest-rate gap with the United States and other major economies, supporting the yen.

That trade has become less straightforward as markets reassess the speed at which Japanese rates can rise.

The possibility of currency intervention remains another constraint on yen traders. Finance Minister Satsuki Katayama said Tokyo would not hesitate to conduct further coordinated action to support the currency, following a joint U.S.-Japan move in late July.

The warning means traders must weigh the BOJ’s monetary-policy trajectory against the government’s willingness to intervene if yen weakness becomes excessive.

The benchmark 10-year Japanese government bond yield fell 4.9 basis points to 2.947% after the decision, another indication that markets did not interpret the BOJ’s latest move as a clear signal of substantially faster tightening ahead.

For the central bank, the challenge now is communicating how much further rates can rise without creating unnecessary volatility in the economy or financial markets. The 1.25% rate is the highest Japan has seen since 1995, marking a significant shift from the negative-rate and ultra-loose monetary-policy era that defined the country’s financial system for decades. But Friday’s dissent means the next stage of normalization could be more contested within the BOJ than the headline rate increase suggests.

The data will now take on greater importance. With core inflation below 2% in August and the yen again under pressure, policymakers will need to determine whether price pressures are persistent enough to justify another increase or whether the economy requires a longer period at the current rate.

Data center developer Crusoe has raised $3.9 billion in a new funding round, giving the company a valuation of $30.9 billion and underscoring the enormous capital flowing into infrastructure needed to support the artificial intelligence boom.

The eight-year-old company said Thursday that its Series F round was co-led by Atreides Management, Mubadala Capital and Valor Equity Partners. Founders Fund, GIC, Nvidia, Qatar Investment Authority, Radical Ventures and TPG also participated.

The funding comes as AI companies and cloud providers race to secure the computing capacity, power and data center infrastructure required to train and operate increasingly demanding AI models. For Crusoe, the latest investment marks a significant jump from the $10 billion valuation it received when it raised $1.38 billion in October.

Crusoe said the new capital will finance its existing data center projects, including its large facility in Abilene, Texas, which is being used by OpenAI. It will also support the company’s smaller modular data centers, known as Spark, which can be manufactured at Crusoe’s facilities and transported by truck to locations with access to large power sources.

That approach is aimed at addressing one of the biggest constraints facing the AI infrastructure industry: how quickly computing capacity can be brought online.

Traditional data centers can require lengthy construction projects, large workforces, and extensive local infrastructure. Crusoe’s modular approach allows the company to manufacture smaller computing facilities away from the eventual deployment site and install them where power is available.

The strategy is also expected to help the company navigate growing resistance from communities concerned about the size, electricity consumption and infrastructure demands of large data center developments.

Crusoe co-founder and CEO said AI could usher in an era of abundance, but achieving that would require controlling the infrastructure supporting AI systems “from electrons to tokens.” The company said its latest investors share that view.

The economics of AI infrastructure

Crusoe has developed a business model that spans several layers of the AI computing market. The company leases data center capacity to customers that bring their own GPUs, rents its own GPUs to customers, and sells computing capacity used to run AI models, a process known as inference.

The combination has helped Crusoe emerge as one of the most valuable privately held AI infrastructure companies as demand for computing continues to expand.

The company recently signed a reported $13 billion, five-year cloud contract to provide GPUs and AI infrastructure to quantitative trading firm Jane Street, according to Bloomberg. Its customers also include Meta, Microsoft and Oracle. The business has changed considerably since Crusoe was founded in 2018. The company initially focused on cryptocurrency mining powered by natural gas that otherwise would have been flared.

As demand for AI computing accelerated, Crusoe shifted toward data centers and AI infrastructure, putting it at the center of a much larger investment cycle.

The latest financing shows how dramatically the value of AI infrastructure businesses has increased. Crusoe raised $1.38 billion at a $10 billion valuation only 10 months ago. Its new valuation of $30.9 billion represents more than a threefold increase in the company’s valuation over that period.

The funding also brings major technology and institutional investors into Crusoe’s ownership structure. Nvidia, whose processors remain central to AI data center deployments, participated alongside sovereign wealth and institutional investors including Mubadala, GIC and QIA.

Nvidia’s participation is relevant as the AI infrastructure market expands beyond chips to the power, networking, cooling and data center systems needed to deploy them at scale.

Crusoe’s modular facilities could become increasingly relevant as conventional data center construction struggles to keep pace with demand. AI workloads require large concentrations of GPUs and substantial electricity supplies, creating pressure on developers to find locations where power can be secured quickly.

The company is betting that speed and flexibility will become more valuable as AI companies continue expanding their computing footprints.

Crusoe has also begun preparing for a potential transition from private markets to public markets. The company recently met with investment banks including Goldman Sachs and Morgan Stanley to discuss a possible initial public offering, Axios reported last month.

A potential IPO would give public-market investors exposure to an AI infrastructure company whose revenues are tied not only to demand for data center space but also to the broader growth of AI computing. For now, however, the $3.9 billion financing gives Crusoe substantial private capital to continue expanding without relying on the public markets.

The company also announced three new board members alongside the funding. They include Thomas Seifert, chief financial officer of Cloudflare; Bill Stein, partner and chief investment officer at Primary Digital Infrastructure; and JB Straubel, founder and CEO of Redwood Materials and a member of Tesla’s board.

Straubel already has a relationship with Crusoe. He personally invested in the company in 2021, while Crusoe subsequently became the first customer of Redwood’s energy storage business.

The connection highlights another issue emerging alongside the AI data center boom: computing capacity is increasingly intertwined with energy infrastructure.

Crusoe’s original business was built around using otherwise wasted natural gas to generate power for cryptocurrency mining. Its current business is focused on providing the computing infrastructure needed by AI companies, but the underlying challenge remains closely connected to energy availability.

As AI models become more computationally intensive, the ability to secure electricity and deploy computing equipment quickly is becoming as important to the industry as access to advanced processors.

Therefore, Crusoe’s latest funding round is seen as another signal of continued investor appetite for the physical infrastructure underneath the AI economy, at a time when the industry is spending heavily to expand computing capacity and secure the power needed to operate it.