Saudi Arabia is offering its long-term oil clients the option to receive their April crude allocations via the Red Sea port of Yanbu, as the kingdom prepares for potential extended disruptions to shipping through the Strait of Hormuz. According to traders informed by Saudi Aramco, buyers opting for Yanbu loadings will only receive a portion of their monthly supply due to limited pipeline capacity to the port. The alternative is to take shipments from the Persian Gulf, though this carries the risk of receiving no oil at all if the strait remains closed.

Saudi Aramco, the world's largest oil exporter, shipped 7.2 million barrels of crude last month, mostly from its Ras Tanura and Ju'aymah terminals in the Gulf, before Iran effectively blocked the Strait of Hormuz. The kingdom operates a pipeline with a capacity of 5 million barrels per day across the country to the Red Sea, but Yanbu's export capacity is likely lower. Saudi Arabia typically sells all its oil via long-term contracts, with the majority going to Asia. Japan has already begun drawing on its national crude reserves.

These options reflect uncertainty over the potential duration of Middle East conflict and the possibility that the Strait of Hormuz may not reopen soon. The lack of clarity on U.S. intentions and Iran's minimal willingness to cooperate add to the uncertainty. Traders noted that if the conflict persists, shipments from Yanbu to Asia will likely be sold on a delivered basis—meaning Aramco handles logistics—rather than the usual free-on-board terms where clients arrange their own shipping. They also indicated that refiners can currently only obtain Arab Light crude via Yanbu.

Since the conflict began, Aramco has been increasing crude shipments via Yanbu, now entering the third week. The Saudi producer has also taken the unusual step of offering crude from the port via spot market tenders. However, this marks the first time the company has offered contractual supply from the Red Sea terminal.

Beyond Asia, some European refiners have reported receiving less crude from Aramco than contracted. One major refiner has been allocated zero shipments for next month, while another received a lower quota than requested.