By Yongchang Chin
August 17, 2026 (Bloomberg) – Some refiners in Asia are resisting Saudi Aramco’s request to pick up their oil at Yanbu on the Red Sea. This is mainly because it's hard to find ships willing to navigate the dangerous waters.
Recent attacks on tankers and energy infrastructure by Iran-backed Houthi militants in the Red Sea have increased risks for shipowners and added another layer to the ongoing conflict in the Middle East. Yanbu has become vital for Saudi Arabia in maintaining large crude oil shipments, especially after the conflict disrupted traffic through the Strait of Hormuz and cut off supplies from the Persian Gulf.
At least two Asian refiners have requested Aramco if they can collect their oil cargoes from the Mediterranean port of Sidi Kerir in Egypt instead. This request, involving cargoes scheduled for September under long-term contracts with Aramco, was made by traders who preferred to remain unnamed. However, one refiner might skip its monthly allocation due to the higher costs of shipping crude from Sidi Kerir around Africa to Asia.
Before Aramco's September sales, some Saudi crude shipments were already redirected to Sidi Kerir. For next month's allocations, Aramco asked Japanese and South Korean refiners to pick up their cargoes from the Egyptian port, while most refiners in China, Taiwan, and India were instructed to collect their oil from Yanbu.
Aramco has not commented on the situation.
Refiners purchase Saudi oil under long-term contracts arranged annually. A specified amount of crude is bought over the year, but buyers have some flexibility on when they can take those volumes, allowing them to adjust their monthly allocations as necessary.
It’s unclear what the total volume allocated by Aramco is for next month, but traders noted that the amount sold to refiners outside China is generally consistent with recent months. Before the Houthi threats, all Saudi oil shipped to Asia was loaded at Yanbu and typically passed through the narrow Bab el-Mandeb strait at the southern end of the Red Sea.
Last month, two Chinese-owned tankers carried Saudi crude through Bab el-Mandeb with their tracking devices active, but many ships are now turning them off to avoid detection and potential attacks.
For September, Aramco has reduced its main crude price for Asian customers, bringing it to the lowest level since 2020. However, these prices apply to oil loaded from Ras Tanura in the Persian Gulf, and the final costs for refiners loading from other locations are higher due to additional logistics involved in transporting the crude further.