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Saudi Arabia could lift Asia crude prices as Red Sea costs rise

The potential increase, which could be as much as $5 per barrel, aims to cover higher shipping expenses tied to a Houthi blockade, a rerouting that may add about $10 million per cargo.

Reported · Written up by our desk · Energy

Saudi Arabia is considering raising the price of crude it ships to Asia via the Suez Canal, with the adjustment linked to higher transport costs after the Houthi maritime blockade in the Red Sea, Reuters reported, citing unnamed sources.

The publication said Saudi Aramco’s response may involve redirecting flows from its Red Sea port of Yanbu to the Ain Sukhra port in Egypt. From there, crude would move through the Suez-Mediterranean pipeline to Sidi Kerir before being shipped to Asia around Africa, which lengthens tanker journeys and increases costs.

The story said the price hike could reach $5 per barrel of crude, and one Reuters source estimated that the rerouting could cost as much as $10 million extra per cargo. Traffic through the Bab el-Mandeb Strait has slowed materially, with some vessel owners shifting routes north toward the Suez Canal.

According to the report, the Suez-Africa route to Asia is about a month longer than sending tankers through Bab el-Mandeb. One Saudi tanker has already taken the longer path, and shipping data cited by the publication showed the supertanker Olympic Luck transited the Suez Canal into the Mediterranean late Sunday, as other tankers reportedly U-turn from Bab el-Mandeb.

Latest closeWTI crude $81.92 ▼8.3%

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