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Asian refiners look to Egypt as safer pickup for Saudi crude

Some refiners are considering canceling monthly allocations due to higher shipping costs from Sidi Kerir via the Mediterranean and around Africa to Asia.

Reported · Written up by our desk · Energy

Heightened shipping safety risks in the Red Sea have led some Asia-based refiners to ask Saudi state oil giant Aramco to shift crude pickup to Egypt’s Mediterranean port of Sidi Kerir, instead of Saudi ports on the Red Sea.

OilPrice, citing anonymous trading sources, reports at least two refiners asked Aramco if they can lift next month cargoes at Sidi Kerir rather than from the Red Sea port of Yanbu. Traders also said at least one refiner could scrap a monthly term allocation because shipping from Sidi Kerir would be more expensive.

The backdrop is vessel owners’ reluctance to transit the Bab el-Mandeb Strait and the Red Sea after Iran-aligned Houthis announced a blockade on Saudi shipments in the southern Red Sea and Bab el-Mandeb strait, while claiming attacks on oil tankers since the end of July, according to the report.

Since the announcement, Saudi Arabia has shuttled more crude from Yanbu to the Egyptian port of Ain Sukhna on the Red Sea and then sent it through the SUMED onshore pipeline to Sidi Kerir, the report said. Aramco has also rerouted some cargoes to Sidi Kerir and asked refiners in South Korea and Japan to pick up their September allocated volume at the Egyptian port.

Latest closeWTI crude $82.40 ▲1.4%

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