Saudi Arabia Redraws Oil-Export Map to Cut Reliance on Hormuz
Saudi Arabia is redrawing its oil-export map in response to the war, which exposed how much of the Kingdom’s crude leans on the Strait of Hormuz. The war has prompted Aramco and the government to move on two fronts: opening new corridors to carry oil overland to Europe and rewriting how Aramco ships and prices the crude it sells to Asia.
The Kingdom is scouting new ways to get oil to Europe, eyeing export corridors through Syria and Turkey, and another via Iraq and Syria. The Economy and Planning Ministry’s chief economist Yaser Faqih said at the Milken Institute’s Asia Summit that production and exports are back to pre-war levels, with September exports nearing pre-war volumes on heavier Hormuz shipments.
Aramco Lines Up New European Routes
Aramco is opening new corridors to carry oil overland to Europe. The company has identified two additional crude-export corridors to strengthen network redundancy, without specifying routes. TotalEnergies CEO Patrick Pouyanné has since said Saudi Arabia has “begun to work” on a crude pipeline to Oman’s Indian Ocean port of Duqm, possibly offering a clue to the Kingdom’s wider search for alternatives.
European Refiners to Receive Full November Crude Allocations
Aramco will deliver full November crude allocations to European refiners, reversing the cutoff that wiped out its October shipments to the continent after a drone attack knocked the East-West pipeline offline. At least three refiners confirmed they will receive complete volumes. The restart of the pipeline is what makes it possible for European barrels to cross the Kingdom to Yanbu and then move via Egypt’s Sumed pipeline to Sidi Kerir on the Mediterranean.
Aramco Reworks Terms of Sale with Asian Customers
Beyond the routes, Aramco is reworking the terms of sale. It’s in talks with customers to offer crude loadings outside Hormuz under its 2027 long-term contracts, potentially turning a wartime workaround into a formal export option. Pricing, freight terms, and eligible volumes are still being negotiated, with no final decisions made and a year-end target to wrap up talks.
Aramco Eyes Direct Shipping of Crude to Asia
The talks go beyond formalizing Aramco‘s ship-to-ship shuttle. The oil giant is exploring arranging the shipping itself to deliver more crude directly to customers, potentially all the way to Asia. That would reverse the pre-war model, in which buyers sent their own vessels, and could let Aramco capture some of the windfall from soaring charter costs.
Pricing Shifts Ahead
Pricing could shift too: Some Asian buyers are discussing pricing long-term purchases against Brent futures instead of Dubai and Oman benchmarks. Long-term contracts make up the bulk of Saudi supply, so any change to their terms would reach most of the Kingdom’s crude.
Original Article: Aramco lines up new European routes and reworks its Asian contracts to cut reliance on Hormuz — Enterpriseam