Talks Cover September Cargoes
Saudi Aramco has offered selected Asian refiners an alternative way to receive crude outside the Strait of Hormuz. According to Reuters, private negotiations cover cargoes of Arab Medium and Arab Heavy crude.
The oil would be delivered through ship-to-ship transfers, commonly known as STS operations, in waters off the United Arab Emirates’ port of Fujairah. One source said the offers concerned cargoes scheduled for September 2026 loading.
The available volumes and prices were not disclosed, and Aramco declined to comment. Reuters also noted that it was not immediately clear how the Saudi cargoes had been moved to Fujairah without following the conventional export route through the Strait of Hormuz.
Buyers Could Keep Their Tankers Outside the Gulf
The main advantage for Asian refiners is that they would not have to send their own vessels into the Persian Gulf. Buyers could take delivery outside the Strait of Hormuz, where persistent security risks have discouraged many shipowners from accepting voyages.
Fujairah is located on the Gulf of Oman, east of the strait. Its position has made the port an important hub for oil storage, bunkering and cargo transfers. Additional Saudi volumes could further strengthen its role in regional energy logistics.
STS transfers do not eliminate transport costs or operational risks. They require compatible tankers, suitable weather conditions, additional insurance and careful offshore coordination. The process can raise freight and handling expenses, but it reduces the buyer’s direct exposure to a high-risk chokepoint.
Aramco Is Using Several Alternative Routes
Since the conflict involving Iran disrupted Gulf exports, Aramco has redirected some Arab Light crude through Saudi Arabia’s East-West Pipeline to the Red Sea port of Yanbu. The company has also offered cargoes from Egypt’s Mediterranean terminal at Sidi Kerir.
Oil supplied through Sidi Kerir is transported to Egypt’s Ain Sukhna terminal on the Red Sea and then moved across the country through the SUMED pipeline. This route avoids both Hormuz and the southern Red Sea, although it creates a significantly longer return voyage for tankers delivering crude to Asian refineries.
Shipowners are currently assessing risks on both sides of the Arabian Peninsula. Hormuz remains exposed to attacks and vessel detentions, while Houthi operations have increased the danger to shipping in the Red Sea. As a result, Aramco has been handling some September allocations individually rather than relying exclusively on its usual monthly process.
Saudi Deliveries to Asia Have Declined
Before the current disruption, Aramco primarily sold crude under term contracts, with buyers arranging the vessels required to collect their allocations from Saudi export terminals. A confirmed allocation no longer guarantees physical delivery if a refiner cannot find a tanker willing to enter the affected waters.
Kpler data cited by Reuters showed that Saudi Arabia supplied approximately 4.9 million barrels per day of crude to Asia in 2025. Shipments fell below 3 million barrels per day in July 2026, although the growing number of voyages with limited vessel-tracking data has reduced market visibility.
Asian refiners are consequently purchasing more crude from outside the Gulf. The region imported a record 2.35 million barrels per day from the United States in July, while buyers have also sought additional cargoes from West Africa.
Oil Trade Routes Could Become More Complex
Aramco’s proposals currently involve a limited number of buyers and do not represent a complete relocation of Saudi exports outside Hormuz. They nevertheless demonstrate how producers are restructuring supply chains as disruption to established shipping routes continues.
If transfers off Fujairah are expanded, intermediate tankers, offshore transfer operations and storage facilities outside the Persian Gulf will become more important. The arrangement could improve access to Saudi crude for Asian refiners, but it may also increase freight, insurance and handling costs.
For the global market, the delivery point is becoming almost as important as the available volume. Moving the transfer outside Hormuz redistributes risk between the producer, trader, shipowner and refiner. Such arrangements may become a more common part of oil trading during prolonged regional instability, although they cannot yet replace the capacity and efficiency of conventional export routes.
Read also: The Strait of Hormuz Again Becomes a Flashpoint Between the US and Iran
