Aramco Weighs New Sidi Kerir Price Track for Asia as Chinese Buyers Pull Back
Saudi Aramco is drawing up a separate official selling price for Red Sea-routed crude, adding pricing complexity on top of its largest Asian discount in more than two decades.
Saudi Aramco has informed at least two Chinese refiners that it may introduce a separate official selling price for crude loaded at Egypt's Sidi Kerir terminal and shipped to Asia, traders told Rigzone on July 29 (2026-07-29). The new mechanism would create a distinct pricing track for barrels routed via the Mediterranean to sidestep Houthi militant attacks in the Red Sea — a route carrying a materially different freight and risk profile than standard Gulf loadings. Aramco has yet to finalise the structure or set a starting date.6
ICE Brent crude front-month stood at $83.34 a barrel as of August 7 (2026-08-07), well above the $73.74 settlement on June 24 (2026-06-24), when supply concerns eased as tankers began exiting the Strait of Hormuz following an interim U.S.-Iran deal. Saudi Arabia's pricing decisions have not tracked that recovery. Aramco delivered its largest official selling price reduction for Asian buyers in more than two decades on Monday, July 6 (2026-07-06), cutting prices by $11 a barrel, driven by surging competing supply and weakening Chinese demand.1,4,3
The July 6 cut failed to hold all Chinese buyers. Some refiners did not nominate term cargoes from Saudi Arabia for August, while others received no term allocation at all, oilprice.com reported on July 14 (2026-07-14). Weak domestic demand in China, competition from alternative producers, and continued disruption in Middle Eastern logistics all contributed.5
Saudi Arabia accounts for roughly 14-15% of global crude exports, according to the Observatory of Economic Complexity, cited in July 7 (2026-07-07) reporting. Defending that share drove the depth of the July 6 price action. But the demand-side pullback from China shows that price reductions alone are not sufficient to maintain volumes, a dynamic that complicates Aramco's market-share defence heading into autumn.4
The supply backdrop that triggered the July pricing decision was sharp. Around 20 million barrels of crude exited the Strait of Hormuz in a single 24-hour period around June 24 (2026-06-24), according to shipbroker estimates presented at the Reuters Global Energy Forum in New York. Three tankers carrying 5 million barrels were among those clearing the strait that day, with two heading to Asia. ICE Brent crude fell $3.34, or 4.3%, on June 24 (2026-06-24), settling at $73.74. Iranian mines in the strait delayed a full return to normal navigation even after the deal unlocked trapped oil.1
The Hormuz strait funnels roughly 20% of global petroleum and LNG flows through a 39-kilometre passage. Its partial reopening crushed Middle Eastern crude benchmarks in weeks and forced Aramco to respond on price.4
The glut persisted into early July. "The market is currently being flooded with crude oil," said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management, in comments cited by Rigzone around July 2 (2026-07-02). WTI was settling below $69 a barrel at that point, with a key oversupply indicator flashing for the first time since November.2
How quickly inventories normalise hinges on two variables: a recovery in Chinese buying and the pace at which governments replenish stockpiles drawn down during the Hormuz disruption, JPMorgan said in analysis cited by Rigzone around July 2 (2026-07-02). Neither looked imminent at the time of those remarks.2
Iran's own export trajectory adds further pressure to the calculus. If sanctions were eased, Iranian production and exports could ramp up in weeks rather than months given the volume stored on tankers, an analyst said at the Reuters Global Energy Forum in New York, in remarks cited on June 24 (2026-06-24). That would add to supply pressure on Middle Eastern grades and compress the headroom for Saudi official selling prices to recover.1
India, which imports nearly 85% of its crude requirements and was among the most exposed economies during the Hormuz blockade, could absorb some Saudi supply at discounted prices, reporting from July 7 (2026-07-07) indicated. Available data does not show Indian buyers stepping up to offset the Chinese retreat at scale.4
For now, the Sidi Kerir mechanism sits undecided. Aramco has not set a starting date and the pricing structure is not finalised, the traders told Rigzone on July 29 (2026-07-29). Asian refiners negotiating August and September supply face pricing uncertainty on an alternative route that has become commercially significant precisely because the primary route remains dangerous — and because the buyers most likely to need that route are the same ones currently pulling back on nominations.6