Saudi Aramco Prepares Separate Asia Price for Mediterranean-Loaded Crude
Houthi pressure on Bab el-Mandeb has pushed Saudi crude onto longer, costlier routes, forcing Aramco to restructure the commercial terms it offers Asian buyers.
Saudi Arabia's non-oil economy now accounts for 55% of real GDP, according to the kingdom's Vision 2030 annual report, but crude export revenue still funds that transition — which is why Aramco is absorbing significant logistics disruption rather than cede Asian market share to rivals.8
The commercial response is taking shape. Saudi Aramco has told at least two Chinese refiners it may introduce a separate official selling price for crude loaded at Egypt's Mediterranean port of Sidi Kerir, according to traders who asked not to be named because they are not authorized to speak to the media. The producer has yet to finalize details, including a starting date, the traders said.6
Sidi Kerir is the Mediterranean terminal for the SUMED pipeline, which runs from Ain Sokhna on the Red Sea coast and can handle around 2.5 million barrels per day at full capacity.4 Routing Saudi crude through SUMED and loading at Sidi Kerir bypasses the Bab el-Mandeb Strait entirely. But it adds cost — industry reporting has described the detour as adding roughly $5 per barrel to shipping expenses, money Aramco is now deciding whether to absorb or pass through a pricing adjustment.4
The pressure on Bab el-Mandeb has been building since late July. Houthi rebels announced they would seek to impose a maritime blockade on Saudi Arabia, prompting a MarineTraffic analyst to say on Wednesday (2026-07-22) that "the Bab el-Mandeb risk picture is deteriorating." Standard Chartered Bank noted that around seven million barrels per day of oil transits through Bab el-Mandeb, and that the Red Sea corridor, taken together with the Suez Canal and SUMED, represents the shortest route for a substantial share of global crude flows.2,3
The strain was already visible in freight patterns by late July (2026-07-27), when at least one tanker carrying Saudi crude to Asia rerouted through the Suez Canal, Montel reported. Two Asian refiners were simultaneously in active discussions with Aramco about diverting cargoes entirely around Africa via the Cape of Good Hope, cryptobriefing.com reported on July 23 (2026-07-23).5,4
Brent crude climbed above $98 per barrel at the height of the disruption, up more than 33% in a month, before pulling back. ICE Brent crude front-month was quoted at $82.38 per barrel as of August 8. The gap between peak and current pricing reflects some easing of market anxiety, but the logistics problem has not resolved.4
Aramco's proposed Sidi Kerir pricing mechanism is designed to make rerouted cargoes commercially workable for Asian buyers. Whether Chinese refiners accept a distinct price for Mediterranean-loaded barrels or switch to competing crudes will shape how much of the extra cost Aramco can recover.6
The competitive pressure is real. Abu Dhabi National Oil Company has been selling crude through tenders at discounted prices, traders told Reuters, and the UAE raised output to near-record highs above 3.8 million barrels per day in June after quitting OPEC to escape production caps. That supply gives Asian buyers room to push back.1
A separate layer of disruption compounded the picture earlier. Energy Voice reported on July 31 (2026-07-31) that the Strait of Hormuz had been almost completely closed for 150 days following the breakdown of a ceasefire on July 8, with conflict between the US and Iran resuming. That closure elevated Bab el-Mandeb's strategic importance as an alternative artery, making its security status more consequential than it would otherwise be.7
Shipping groups Maersk and Hapag-Lloyd were preparing to resume some sailings through the Suez Canal, which handles roughly 10% of global trade, signaling that commercial operators see some potential for de-escalation. But the Houthi blockade threat against Saudi Arabia specifically is a newer and distinct pressure that the resumption of container shipping alone would not resolve.1
Non-oil revenues have risen substantially in Saudi Arabia since 2016, according to the Vision 2030 annual report, but the kingdom's fiscal arithmetic still depends on keeping Asian refiners supplied. Losing those customers to UAE or Russian barrels — even temporarily — would be difficult to reverse once supply relationships reset.8
The next concrete signal is whether Aramco finalizes the Sidi Kerir price structure before Chinese refiners' September cargo nominations close. If the discount is set too narrowly, buyers route elsewhere. If it adequately compensates for Cape diversion costs, it becomes a durable pricing tier — and an admission that Riyadh is building commercial architecture around a Red Sea corridor it no longer expects to normalize quickly.6,2