Asian refiners seek to avoid picking Saudi crude from Red Sea

Asian refiners are asking Saudi Aramco to let them collect crude from Egypt instead of the Red Sea port of Yanbu, after Houthi attacks on shipping in the region. At least two refiners have requested that their September contracted cargoes be shifted to Sidi Kerir on the Mediterranean, according to a Bloomberg report. The requests come as shipowners become reluctant to navigate the Bab el-Mandeb strait, where Iran-backed Houthi militants have attacked tankers and energy infrastructure.

The higher cost of moving crude from Sidi Kerir to Asia via a longer route around Africa may lead one refiner to skip its monthly allocation altogether, traders told Bloomberg. Aramco has already redirected some Saudi cargoes to Sidi Kerir for September. Refiners in Japan and South Korea were asked to collect from Egypt, while those in China, Taiwan and India were mostly told to take shipments from Yanbu. Aramco lowered its main crude price for Asian buyers for September, offering the deepest discount since 2020, though the price applies only to crude loaded at Ras Tanura in the Persian Gulf.