Saudi Arabia and Asian Refiners Clash Over 2027 Oil Supply Terms

Refiners are pushing to classify the spot volumes acquired throughout 2026 as part of their fixed-term contracts, arguing that these purchases were necessary substitutes when producers failed to deliver promised cargo. Saudi Arabia rejects this interpretation, reportedly pressuring buyers to increase their 2027 commitments to compensate for what the Kingdom views as a failure to meet current contractual obligations.

This friction has already begun to disrupt the spot market, with Asian buyers slowing their November orders for Middle Eastern crude. While Abu Dhabi’s ADNOC has shown flexibility by allowing some refiners to count spot sales toward their term quotas, the arrangement remains temporary and uncertain for the coming year. With January 2027 loading schedules looming, the lack of clarity on term volumes threatens to leave the regional market in a state of chronic volatility, as refiners remain hesitant to lock in higher commitments amidst persistent geopolitical instability.