Middle East Crude Premiums Soar Amid Red Sea Tanker Attacks

The Middle East crude premiums have surged to their highest in two months due to attacks on tankers in the Red Sea. The incidents, carried out by Yemen's Iran-aligned Houthis, have led to a rerouting of some Saudi oil shipments via a route that circles Africa, further disrupting supply flows.

Spot premiums for Middle Eastern crude benchmarks, such as Dubai and Oman, have doubled, reaching $12.74 and $12.62 per barrel respectively. Brent's premium to Dubai has also increased to its highest since May 4, at $13.22 per barrel.

The rising security threat has prompted several oil tankers to change course in the Red Sea, with some heading north towards the Suez Canal. Saudi Aramco has offered additional crude cargoes for loading from Egypt's Mediterranean port of Sidi Kerir, and several Asian refiners are looking for cargoes and vessels loading from this port.

SK Energy, South Korea's largest refiner, has chartered a VLCC to load 2 million barrels of crude from Sidi Kerir. Japanese and South Korean refiners are rushing into the market to buy cargoes, with North Asia refiners seeking Atlantic Basin crude.