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.
Aramco typically exports the bulk of its crude from ports within the Gulf, but conflict in the Middle East has led to a logjam of vessels. The world's biggest oil exporter has a 5 million barrel-a-day pipeline that runs across the country which can transport oil from fields in the east to the Red Sea in the west.
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.
Saudi Arabia produces about 10 million barrels a day of crude, with observed exports rising to about 7.2 million a day last month. The country's 746-mile East-West Pipeline's current capacity won't be enough to cover all of its overseas sales. Still, it gives the kingdom an alternative.
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 9 March, 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.
In a separate tender which closed on 8 March, Aramco offered 650,000 barrels of Arab Light crude on a cost and freight (CFR) basis. 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.
Asia sources 60% of its oil and petrochemicals feedstock from the Middle East and refiners struggling to find immediate alternatives are facing output cuts.
