Saudi Aramco Rarely Issues Bids to Sell Spot Crude Oil, Pressure on Red Sea Route Reflects Supply Crisis.

Informed traders revealed that Saudi Aramco recently offered immediate crude oil supply through a series of rare spot tenders. This was due to the factual closure of the Strait of Hormuz, which has caused partial disruption in maritime shipping, forcing the country's refineries to reallocate oil tankers through the Red Sea route. As the world's largest crude oil exporter, Saudi Aramco introduced three grades of crude oil - Arab Extra Light, Arab Heavy, and flagship product Arab Light, with a total tender volume of about 4.6 million barrels. This spot tender reflects the tight supply situation in the current crude oil market. The Saudi state-owned oil company typically sells crude oil through long-term contracts, but after traditional sales channels were blocked, they are now transporting an unprecedented amount of crude oil through pipelines to the Red Sea port. Bloomberg vessel tracking data shows that the crude oil shipment from its western terminal has surged to about 2.3 million barrels per day this month, 50% higher than any monthly level since the end of 2016. According to traders, the spot tender this time has a premium compared to the official selling price in March. It should be noted that the pricing benchmark was set a month ago, long before the current escalation of tensions in the Middle East.