Aramco nears $10 billion loan from global banks, Bloomberg says

Summary

• Aramco is close to a $10 billion revolving credit facility with international lenders, Bloomberg reported.
• Chinese, American, European and Japanese banks are among the lenders, with signing expected within weeks.
• The borrowing lands as Middle East conflict threatens Saudi crude exports and energy firms chase debt.

The latest

Saudi oil giant Aramco is closing in on a $10 billion loan from a group of international banks, a deal that would strengthen its financial position at a moment when regional conflict is threatening crude exports, Bloomberg reported, citing people familiar with the matter. The revolving credit facility is expected to be signed in the coming weeks.

Details

• The lenders: Bank of China, Citigroup, HSBC Holdings, Industrial and Commercial Bank of China, JPMorgan Chase and Mitsubishi UFJ Financial Group are among the institutions set to provide the facility, according to people familiar with the matter cited by Bloomberg. The lineup spans Chinese, American, European and Japanese lenders.
• The pricing: The new facility is due to be priced at 60 basis points over the secured overnight financing rate, the same people said. They asked not to be identified because the discussions are private, Bloomberg reported.
• No comment: Spokespeople for Citi, HSBC, JPMorgan, Mitsubishi UFJ Financial Group, Standard Chartered and Aramco declined to comment, Bloomberg said. A representative for Bank of China could not immediately be reached, and a spokesperson for Industrial and Commercial Bank did not respond to a request for comment.
• The war backdrop: Aramco benefited from higher oil prices during the war with Iran, and resumed raising exports and output after both dropped in the opening days of the conflict, according to Bloomberg. Yemen's Iran-aligned Houthi group has targeted the company's headquarters in recent weeks.
• The targets hit: Houthi attacks also struck a major oil field and a refinery, along with the main Red Sea port of Yanbu, Bloomberg reported. No figures were given for damage or for any production lost at the sites.
• The precedent: Aramco signed its previous revolving credit facility in 2024. It came in two tranches: $7 billion arranged by American, European and Asian lenders, and $3 billion structured as a murabaha facility funded by regional banks.
• The Gulf trend: Gulf energy companies are turning increasingly to debt markets for large financings, according to Bloomberg. QatarEnergy raised a $3 billion loan this month, most of it coming from a group of Chinese banks.
• Another deal: Saudi Electricity Company secured Sharia-compliant murabaha financing worth 15.8 billion riyals, equivalent to $4.1 billion, in July. The facility was provided by a group of seven Gulf banks.

Background

A revolving credit facility lets a borrower draw, repay and redraw funds up to an agreed ceiling, functioning as standby liquidity rather than a one-off cash injection. Aramco's 2024 version combined conventional and Islamic tranches across lenders in three regions.

Between the lines

The lender list is the story within the story: Chinese, American, European and Japanese banks sitting in the same facility while Houthi strikes hit Aramco's headquarters, a refinery and Yanbu. Pricing at 60 basis points over SOFR suggests the war risk has not meaningfully repriced Saudi credit. QatarEnergy's $3 billion, drawn largely from Chinese banks, points the same direction.

What's next

Watch for the facility's signing in the coming weeks, any confirmation from Aramco or the lead banks, and whether further Houthi strikes on Saudi energy infrastructure alter export volumes or borrowing terms.

Source: Bloomberg