Aramco lines up USD 10 bn credit line amid rising capital needs and Houthi strikes

Aramco is in the final stages of talks with international banks on a USD 10 bn revolving credit facility, which it aims to use to strengthen its finances as regional conflicts put crude exports at risk, Bloomberg reports, citing sources close to the talks. The agreement is expected to be signed within weeks, with pricing set at 60 bps above SOFR. Lenders include Bank of China, Citigroup, HSBC Holdings, Industrial and Commercial Bank of China, JPMorgan Chase, and Mitsubishi UFJ Financial Group.

The debt push comes amid mounting capital requirements, with Aramco CEO Amin Nasser saying earlier this month that “globally, the squeeze on crude oil is serious.” The company is working on additional crude oil export routes and more storage overseas, as well as rebuilding inventories, which could take as long as two years. Aramco’s goal is to limit supply disruptions in coordination with the Energy Ministry, Nasser said.

Aramco has started to spend on its rerouting plans: The Kingdom aims to lift crude pipeline capacity outside the Gulf to 10 mn bbl / d within two to three years, and Aramco has directly awarded SAR 2.4 bn in contracts to local pipe makers since the start of the year, about 85% of it since the war began.

It all comes amid repeated Houthi strikes on Aramco infrastructure since hostilities with Riyadh escalated. Earlier this month, the group hit Aramco’s Ras Tanura refinery, its administrative building in Dhahran, and the Shedgum gas plant and Tanajib oil facility in the Eastern Province, as well as the Rabigh refinery on the west coast. The strain extends beyond Aramco. The conflict is putting mounting pressure on the Kingdom’s wider economy, with Riyadh also turning to international lenders to shore up its balance sheet.