4.6 million barrels listed! Saudi Arabia rarely supplies crude oil in spot market

# Yang Chen

Source: Wallstreetcn

Saudi Aramco breaks its long-term contract trading practice and rarely sells crude oil via tenders in the spot market. It has issued offers for Arab Extra Light, Arab Heavy, and its flagship grade Arab Light crude, with a total of about **4.6 million barrels** of the three grades listed recently. The tender offers are set at a premium above the March Official Selling Price (OSP).

The war has disrupted the supply order of the world’s largest crude oil exporter. Saudi Aramco’s rare sale of crude oil through spot market tenders reflects the profound impact of the Middle East conflict on global crude trade flows.

According to Bloomberg, citing informed traders, Saudi Aramco has issued offers for Arab Extra Light, Arab Heavy, and its flagship grade Arab Light crude, with a combined volume of about 4.6 million barrels offered in recent days.

The de facto closure of the Strait of Hormuz has trapped a large number of vessels, forcing Saudi Arabia to divert crude exports via the Red Sea, triggering this rare spot sale.

The shift is confirmed by shipping data. Vessel-tracking data compiled by Bloomberg show that loadings from Saudi Arabia’s western ports have climbed to about **2.3 million barrels per day** so far this month, roughly 50% higher than the monthly average at these terminals in any month since late 2016.

## Spot tender breaks tradition, covering three main crude grades

Saudi Aramco typically supplies crude oil only through long-term contracts, making public tenders in the spot market highly unusual. The move to the spot market is a direct result of the Strait of Hormuz blockade, which has disrupted the normal flow of contract cargoes delivered through regular channels.

As reported by Bloomberg, informed traders said the transaction covers Arab Extra Light, Arab Heavy, and Arab Light crude, with a combined supply of about 4.6 million barrels in recent days. The pricing and supply volumes have not been officially confirmed.

## Pipeline surges, Red Sea becomes key export route

Facing the disruption in the Strait of Hormuz, Saudi Arabia has been pumping an unprecedented volume of crude via pipelines to Yanbu port on the Red Sea coast for export.

Bloomberg shipping data show that loadings from western ports are about 50% above levels in comparable months in recent years. The sharp increase underscores the urgency of Saudi Arabia’s export route re-routing and means Red Sea shipping is under extraordinary flow pressure.

## OSP benchmark lags; spot premium signals tightness

The tender offers are priced **at a premium above the March OSP**. Since the OSP was set about a month ago, before the outbreak of the Middle East war, the current spot premium partly reflects the extra risk premium caused by supply disruptions.

For crude market participants, Saudi Aramco’s rare spot tender and the accompanying premium pricing serve as an important gauge of current supply pressure and market tightness.

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