Asian Refiners Seek Alternative Pickup Point for Saudi Crude Amid Red Sea Risks

Heightened risks to shipping safety in the Red Sea have prompted some Asian refiners to ask Saudi state oil giant Aramco to pick up its crude oil cargoes at Egypt’s Mediterranean port of Sidi Kerir. Vessel owners are increasingly reluctant to pass through the Bab el-Mandeb Strait to enter the Red Sea.

At least two Asia-based refiners have requested Saudi Aramco to pick up their purchased oil cargoes next month from Sidi Kerir instead of the Saudi port of Yanbu on the Red Sea, anonymous trading sources told Bloomberg. However, at least one of these refiners might scrap their monthly term allocation altogether due to the higher costs to ship the crude from Sidi Kerir via the Mediterranean and around Africa to Asia.

Ship owners, operators, and Asian refiners have been wary of navigating the Bab el-Mandeb Strait and the Red Sea in recent weeks, following threats from the Iran-aligned Houthis to blockade Saudi shipments in the area and claims of several attacks on oil tankers since late July. Since the Houthis announced a blockade on Saudi shipments in the southern Red Sea and Bab el-Mandeb Strait, Saudi Arabia has been rerouting more crude from Yanbu via tankers to the Egyptian port of Ain Sukhna on the Red Sea, and then using the SUMED onshore pipeline to the Sidi Kerir port.

Aramco has rerouted some cargoes to Sidi Kerir and asked refiners in South Korea and Japan to pick their September allocated volume at the Egyptian port. However, most refiners in China, India, and Taiwan were asked to pick their cargoes from the Red Sea port of Yanbu, according to Bloomberg’s trading sources. The Houthis are reportedly allowing China-linked and China-crewed vessels to move in the Red Sea.