Aramco reroutes exports and rethinks Asian contracts to reduce Hormuz exposure

Saudi Arabia is reshaping how its crude reaches customers after the war exposed how heavily the Kingdom depends on the Strait of Hormuz. Aramco and the government are working on two fronts: new overland routes to Europe, and new shipping and pricing terms for Asian buyers.

In the near term, Aramco will deliver full November crude allocations to European refiners, Bloomberg reported, citing people familiar with the matter. That reverses an October cutoff imposed after a drone attack knocked the East-West pipeline offline. At least three refiners have confirmed complete volumes. European barrels cross the Kingdom to Yanbu, then move through Egypt's Sumed pipeline to Sidi Kerir on the Mediterranean. Poland's Orlen, which takes about 40% of its oil from Aramco, had to buy replacement cargoes during the outage.

Longer term, the Economy and Planning Ministry's chief economist Yaser Faqih said the Kingdom is studying export corridors through Syria and Turkey, and via Iraq and Syria. Aramco CEO Amin Nasser said last month the company was studying two additional export corridors, and TotalEnergies CEO Patrick Pouyanné has said Saudi Arabia has begun work on a pipeline to Oman's port of Duqm.

Aramco is also renegotiating how it sells to Asia. It is in talks to offer loadings outside Hormuz under its 2027 long-term contracts, and is exploring arranging shipping itself rather than having buyers send their own vessels. Some Asian buyers are discussing pricing long-term volumes against Brent futures instead of Dubai and Oman benchmarks. Pricing, freight terms and volumes are still under negotiation, with a year-end target.

Faqih said production and exports are back to pre-war levels. Because long-term contracts make up most Saudi supply, any change to their terms would affect most of the Kingdom's crude, so refiners and traders worldwide will follow the outcome closely.

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