Saudi Aramco offers oil in rare tenders as Iran war disrupts exports, traders say

SINGAPORE: Saudi Aramco has offered more than 4 million barrels of Saudi crude in rare tenders as the U.S.-Iran conflict disrupts exports from the Middle East, several traders said.

The state oil company is attempting to reroute some of its crude exports through the Red Sea to avoid the Strait of Hormuz, where roughly a fifth of global oil and liquefied natural gas flows.

Iraq and Kuwait are among Middle Eastern producers to have begun cutting oil output amid the virtual closure of the Strait.

In a tender that closed at 5 p.m. Beijing time (0900 GMT) on Monday, Aramco offered 2 million barrels of Arab Heavy crude loading at Egypt’s Ain Sokhna port.

The loading date, subject to confirmation, is from March 10 to March 30, according to a tender document shared by the traders. The sale, on a free-on-board basis, is destined for Asia.

READ MORE: Saudi Aramco seeks to reroute crude away from Strait of Hormuz, sources say

In a separate tender which closed on Sunday, Aramco offered 650,000 barrels of Arab Light crude on a cost and freight (CFR) basis, three traders said.

The delivery date for the cargo is to be decided, according to the tender document shared by traders. Arrival will be based on voyage time from Yanbu to the customer’s discharge port.

The cargoes are to be priced at premiums to Saudi’s March official selling prices.

Aramco sold 2 million barrels of Arab Extra Light crude to Japan’s second-largest refiner Idemitsu Kosan in a third tender, three traders said.

The cargo, sold on a CFR basis, was already on a vessel near Taiwan, two of them added.

Both Aramco and Idemitsu declined to comment.

Asia sources 60% of its oil and petrochemicals feedstock from the Middle East and refiners struggling to find immediate alternatives are facing output cuts.