Saudi Aramco’s negotiations with Asian oil refiners for 2027 term contracts have stalled due to disagreements over how to account for recent spot market purchases, according to The Hindu BusinessLine. Traders involved in the discussions said the core issue is whether crude bought on the spot market during the current year should count toward refiners’ annual contractual obligations. If spot buying is excluded, many Asian processors will struggle to meet their 2026 commitments to the Saudi producer.
The dispute is a direct consequence of the West Asia war, which reduced regional exports and prevented customers from collecting their contracted supply. This shortage forced refiners to switch to opportunistic buying via the spot market. To meet this demand, Aramco increased spot sales to Asia from early September, leveraging a recovery in flows through the Strait of Hormuz despite continued ship attacks. Now, as the world’s top crude exporter seeks to revert to contract-based sales for next year, it is asking refiners to take on more volume to make up for the current shortfall.
According to The Hindu BusinessLine, at least one refiner has been asked to compensate for this year’s deficit by committing to higher crude volumes in 2027, a requirement it is currently resisting. Many Asian buyers are hesitant to lock in more contracted purchases given the persistent uncertainty over regional flows. This hesitation is spilling over into the spot market, slowing purchases of Saudi crude and oil from other West Asian producers. Term-contract discussions typically conclude by the end of October, allowing refiners to plan January-loading orders in November.
Aramco has also floated changes to pricing benchmarks and delivery terms to address the imbalance. One option under consideration involves the Saudi producer taking on the responsibility of transporting crude directly to some Asian customers. The Hindu BusinessLine noted that Aramco declined to comment on the specific details of these negotiations. The security situation in the region will likely remain a key factor in determining how these contracts are ultimately structured.