Saudi Aramco offers Asian refiners crude outside Strait of Hormuz

Saudi Aramco is offering crude oil to some Asian refiners through supplies delivered outside the Strait of Hormuz, two sources familiar with the matter told Reuters, as oil companies seek ways to bypass disruptions around the key shipping route.

The Saudi oil giant is negotiating with buyers to supply Arab Medium and Arab Heavy crude through ship-to-ship transfers off Fujairah in the United Arab Emirates, the sources said. One source said the cargoes were for September loading.

The move follows a similar strategy by Abu Dhabi National Oil Co. and highlights efforts by Gulf producers to keep crude flowing despite prolonged disruption around the Strait of Hormuz.

It was not immediately clear how Aramco moved the cargoes to Fujairah. Aramco declined to comment.

The company has also redirected Arab Light crude to the Red Sea port of Yanbu for export since the Iran war began. It has additionally offered the grade from Egypt’s Mediterranean port of Sidi Kerir following attacks in the Red Sea by Iran-aligned Houthi forces.

Disruptions in crude shipments through the Strait of Hormuz and the Red Sea have reduced Aramco’s market share in major consuming markets such as India.

By contrast, the United Arab Emirates has increased oil sales by maintaining shipments of crude from inside the Gulf to waters outside the Strait. ADNOC has sold more than 100 million barrels through tenders, according to the sources.

The arrangements allow Asian refiners to receive crude without sending their own tankers through the Strait of Hormuz, where security concerns have discouraged many shipowners from operating.

By Aghakazim Guliyev