Aramco plans special Asia pricing for crude via Egypt as Red Sea attacks persist

AI digestMimile.ai EditorialJuly 29, 2026 at 06:03 PM

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Aramco plans special Asia pricing for crude via Egypt as Red Sea attacks persist

Saudi Aramco is developing a special pricing mechanism for crude oil shipments to Asia via Egypt’s Sidi Kerir port, bypassing the Red Sea's Yanbu terminal due to persistent Houthi attacks that have disrupted shipping. The state oil giant aims to accommodate Asian refiners' demands for discounts of up to $10 per barrel as rerouted voyages around the Cape of Good Hope inflate freight costs. The move comes as negotiations with Indian and Chinese state refiners remain unresolved.

Red Sea Shipping Crisis

Houthi attacks on vessels in the Red Sea have prompted shipowners to abandon Yanbu, Saudi Arabia's key Red Sea export terminal, forcing tankers to take the longer route around South Africa's Cape of Good Hope. The detour adds weeks to transit times and raises freight costs by hundreds of thousands of dollars per voyage. Aramco has been compelled to redirect crude shipments to Egypt’s Sidi Kerir terminal, a Mediterranean port that then pumps oil through the SUMED pipeline for onward export. The shift has eroded the competitiveness of Yanbu-based pricing for Asian buyers, who now bear higher transport costs.

Pricing and Route Diversification

Indian state refiners have requested discounts ranging from $5 to $10 per barrel compared to the official selling price formula based on Yanbu loadings. Chinese refiners are engaged in separate negotiations with Aramco, reflecting broader Asian discontent. In response, Aramco is planning a dedicated pricing mechanism for oil supplied via the Egypt route, potentially establishing a new regional benchmark. The company is also exploring operational alternatives, including direct delivery to Asian refineries or ship-to-ship transfers in the Red Sea. The final structure of the pricing system remains under discussion, with no fixed timeline for implementation.

What's Next

Aramco is expected to unveil the new pricing formula in the coming months, though the company has not disclosed a timeline. It remains unclear whether the Egypt route will become a permanent fixture in Asian crude contracts or if improved security in the Red Sea could render the alternative pricing unnecessary.

1 source

Aramco plans special Asia pricing for crude via Egypt as Red Sea attacks persist

finans.sabah.com.tr

Sabah

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Aramco plans special Asia pricing for crude via Egypt as Red Sea attacks persist

Red Sea Shipping Crisis

Pricing and Route Diversification

What's Next

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