Saudi End-September Cargoes to China at Risk, Argus Source Warns
A market source told Argus that all Saudi crude deliveries for September 21-30 could be at risk as Hormuz disruption and weak Chinese demand reshape trade flows.
One market source told Argus that every Saudi crude cargo scheduled for delivery in the final ten days of September could be at risk, extending a disruption to the China-Saudi trade corridor that has persisted since the US-Iran conflict began. ICE Brent crude front-month traded near $107.98 a barrel on Tuesday (2026-09-15), but physical delivery conditions for Chinese refiners look markedly tighter than the paper market implies.3
Since the war began, Saudi Arabia has been allocating between 10 million and 20 million barrels a month for shipment to China, against roughly 40 million barrels monthly that Chinese refiners received before hostilities, according to oilprice.com. Some Chinese refiners did not nominate term cargoes for August at all; others received no allocation. The Argus source warning on late September suggests the situation is worsening rather than stabilising.3
Chinese demand is providing no offset. China's June crude oil imports fell 41% to a near-decade low of 7.2 million barrels per day, according to data cited by Mirae Asset. Stocks declined by only 54 million barrels since early May 2026 to around 1.2 billion barrels, leaving refiners with enough buffer to absorb some disruption without urgently sourcing replacement supply.4
Routing uncertainty is adding a second pressure. At least two Asia-based refiners asked Saudi Aramco whether they could lift purchased crude from Sidi Kerir in Egypt rather than from the Red Sea port of Yanbu, trading sources told Bloomberg. But most refiners in China, India, and Taiwan were still directed to pick their cargoes from Yanbu, Bloomberg reported. That port sits in the corridor where ship attacks have already slowed traffic.5
US Treasury Secretary Scott Bessent described an "unprecedented" campaign to isolate Iran from the global economy in late August (2026-08-24), citing pressure on Tehran over Strait of Hormuz access. NYMEX WTI front-month fell 2.4% on the announcement. Traders read the move as pointing toward a diplomatic resolution; tighter sanctions that fail to produce a deal could equally harden Iran's stance on transit. Normal Hormuz traffic has not resumed.6
Hormuz has not stayed entirely shut. A US-Iran interim agreement in mid-June (2026-06-18) triggered one of the biggest shipping days since the conflict began: four supertankers carrying about 8 million barrels emerged from or sailed through the strait, LSEG data showed, including the first Saudi-owned vessels since hostilities started. Kpler data showed Iranian-flagged VLCCs Dan and Hawk entered the strait on Saturday (2026-06-27), while about 8 million barrels of Emirati and Qatari crude moved out on four VLCCs that weekend.1,2
West Asia producers kept loading through renewed attacks. A fourth Very Large Crude Carrier was seen taking on cargo at Saudi Arabia's Ras Tanura terminal on Monday (2026-06-29), LSEG data showed, one day after a helicopter crash at the terminal on Sunday (2026-06-28) killed 14 people.2
Those resumed Gulf exports briefly sent prices lower. ICE Brent fell 10.6% over the week of June 22 (2026-06-22), its third consecutive weekly decline. Prices recovered on Monday (2026-06-29) when fresh weekend attacks reintroduced supply uncertainty to the market.2
Mirae Asset's Mohammed Imran told investors in late July (2026-07-31) that ICE Brent could average around $80 a barrel if the war did not extend, or closer to $90 by year-end if Hormuz disruption persisted through mid-September. ICE Brent front-month above $107 has already exceeded both projections. Whether late-September loading programmes hold or Aramco begins deferring cargoes into October will be the first concrete test of how much physical supply damage the conflict has now locked in.4