Saudis in Talks to Formalize Hormuz Shuttles in Fight for Market

(Bloomberg) — Saudi Arabia is in talks with customers to offer oil loadings next year outside the Strait of Hormuz in long-term contracts, formalizing a system the kingdom has been using during the Iran war as it pushes for greater market share.

Discussions are ongoing and must conclude by year-end, according to people familiar with the matter. If approved, it would mark a significant change in the way Saudi Arabia sends its crude to customers, as deliveries under long-term contracts make up the bulk of the kingdom’s supply.

The war in its eighth month has sent traditional oil shipping routes into turmoil with Hormuz severely disrupted. Major Gulf exporters have been forced to adapt to keep customers satisfied, with shuttles through the strait — where the seller often takes the risk of passage and transfers cargoes to other vessels outside the waterway — emerging as a crucial system to keep markets supplied as competition for buyers picks up.

State-run Saudi Aramco is also discussing other changes, including a choice of pricing benchmarks and even delivering cargoes all the way to customers in Asia, the people said, asking not to be identified because the talks are private. No final decisions have been made, and details including pricing, freight and eligible volumes remain under discussion, they said.

Aramco and the Saudi Energy Ministry didn’t respond to requests for comment on the talks.

Before the conflict, Aramco’s main customers in Asia arranged vessels to collect oil they bought from the company at the Ras Tanura export terminal, deep inside the Gulf. The Saudi company generally wasn’t involved in arranging the shipping.

Since the war began, some shipowners have been reluctant to enter Hormuz, leaving buyers struggling to secure tankers at a reasonable cost even when oil is available. That gave rise to the Hormuz shuttling system that the United Arab Emirates, Saudi Arabia, Kuwait and Iraq have used to deliver their cargoes outside the waterway via ship-to-ship transfers.

Saudi Aramco has been supplying its three main export grades — Arab Light, Medium and Heavy — using these shuttles, the people said. 

Recently, the company has also allowed some buyers to conduct ship-to-ship transfer off the coast of India, one of the people said. That allows customers who can’t travel to the Gulf of Oman because of security issues a potentially safer option, while also helping to alleviate congestion around Arabian peninsula ports.

Aramco is also exploring ways to arrange the shipping to deliver more crude directly to customers, the people said. In addition to facilitating the flow of exports, these options could also allow Aramco to capture some of the gains from the soaring cost of hiring ships to traverse Hormuz, the people said.

Some Asian customers have also been in discussions with Aramco to potentially price long-term, contractual purchases against Brent futures instead of the Dubai and Oman benchmarks, the people said. That would also represent a new degree of flexibility from the Gulf producer.

© 2026 Bloomberg L.P.

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