Saudi Arabia is discussing arrangements with customers to include crude loadings outside the Strait of Hormuz in next year’s long-term contracts, according to a Bloomberg report carried by gCaptain. The proposal would put a wartime shuttle system on a contractual footing as the kingdom seeks a larger market share. Talks remain under way and must finish by year-end, people familiar with the discussions said.
The Iran war, now in its eighth month, has severely disrupted Hormuz traffic and forced Gulf exporters to find alternative ways of serving buyers. Shuttle operations typically involve the seller assuming the risk of passage through the strait before transferring oil to another tanker outside it. Saudi Arabia, the United Arab Emirates, Kuwait and Iraq have used such ship-to-ship arrangements to maintain exports as competition for customers increases.
Before the conflict, Saudi Aramco’s principal Asian customers generally chartered their own vessels to collect crude from Ras Tanura inside the Gulf, with the producer usually taking no part in shipping arrangements. Reluctance among some shipowners to transit Hormuz has since made it difficult for buyers to find reasonably priced tankers, even where crude supplies are available. The report’s sources said Aramco has used shuttles for Arab Light, Arab Medium and Arab Heavy, its three main export grades.
Aramco has recently also permitted some customers to make ship-to-ship transfers off India, one source said. That offers a potentially safer loading option for buyers unable to reach the Gulf of Oman because of security concerns, while helping ease congestion near Arabian peninsula ports. Separately, the company is examining arrangements to ship more crude directly to customers, including in Asia. Sources said this could support exports and allow Aramco to benefit from elevated rates for ships crossing Hormuz.
Some Asian buyers are also discussing whether long-term purchases could be priced against Brent futures rather than Dubai and Oman benchmarks. None of the proposed changes has been finalised, and pricing, freight arrangements and qualifying volumes remain unresolved. Long-term contracts account for most Saudi supply, making any agreement a significant shift in delivery practices. Aramco and the Saudi Energy Ministry did not respond to requests for comment, the report said.