Saudi Aramco is preparing a new selling price for oil loaded at Egypt's Mediterranean port of Sidi Kerir for delivery to Asia after attacks by Iran-backed Houthi militants elevated risks in the Red Sea.
The producer has informed at least two Chinese refiners that it may introduce a separate official selling price for oil shipped from Sidi Kerir, the traders said, asking not to be named as they're not allowed to speak to the media.
State-run Aramco has been asking Asian customers to take oil deliveries from the Egyptian port, near the Suez Canal exit from the Red Sea, as some shipowners are avoiding Yanbu fearing Houthi attacks. Meanwhile, Asian refiners are pressing Saudi Arabia for discounts to offset the higher freight costs and longer transit times required for these cargoes that need to sail around Cape of Good Hope in South Africa.
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The Saudi oil producer has yet to finalise details of the mechanism, including its starting date, the traders said. Other arrangements are still possible, including Aramco delivering the oil all the way to Asian shores, or using ship-to-ship transfers after sailing part of the way east through the Red Sea.
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Buyers in Asia, including Indian and South Korean refiners, increasingly leaned on cargoes from Yanbu since the Iran war effectively shut the Strait of Hormuz.
