Saudi Aramco will supply full contractual crude volumes to at least three European refiners in September, offering deliveries from Egypt, Saudi Arabia and through ship-to-ship transfers off Malta as the war disrupts the kingdom’s normal export routes, Bloomberg reported on Wednesday via The Edge Malaysia.
Two European refiners will take their barrels from Egypt’s Mediterranean port of Sidi Kerir, while a third can choose between Sidi Kerir, Saudi Arabia’s Red Sea port of Yanbu or a ship-to-ship transfer off Malta, Bloomberg reported Wednesday, citing people familiar with the allocations. Aramco notified its European customers about a week later than usual.
The news adds some supply certainty for European refiners at a time when Saudi Arabia’s two principal maritime export routes remain under pressure. Traffic through the Strait of Hormuz is still heavily disrupted by the Iran war, while Houthi attacks have made the Red Sea increasingly difficult for commercial shipping.
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Saudi Arabia is simultaneously beginning to load crude from inside the Persian Gulf again. Aramco resumed loadings at Ras Tanura and Juaymah last week after a three-week interruption, with three VLCCs loading roughly 2 million barrels each between August 12 and August 16.
The Kingdom has increasingly diverted crude north through Egypt to Sidi Kerir as an alternative to sending tankers south from Yanbu through the Houthi-threatened Bab el-Mandeb Strait. Aramco began offering additional Sidi Kerir cargoes last month as shipowners pulled back from the Red Sea route.
Aramco is having a harder time placing September barrels with some Asian customers. Several buyers are pushing back against requests to load at Yanbu because of the Houthi threat, while Egypt adds significant time and cost. Sidi Kerir solves that problem for European buyers because the crude is already on the Mediterranean.
By Michael Kern for Oilprice.com
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