Saudi Aramco Diverts Oil Exports via Egypt Amid Yemen Blockade
Saudi Aramco is re-routing its crude exports through Egypt due to a naval blockade imposed by Yemen's Iran-aligned Houthis on the Red Sea's Bab el-Mandeb strait. This diversion adds higher shipping costs and a longer route for oil shipments from Yanbu to Asia, prompting the producer to consider adjusting its pricing mechanism.
The new route involves shipping oil from Yanbu to Egypt's Ain Sukhna port via the Suez Mediterranean pipeline, which then carries the crude to Sidi Kerir. Saudi Aramco has traditionally sold its crude to term customers based on its monthly official selling price (OSP) for Asia plus a pipeline fee.
The producer could adjust its pricing to take into account higher freight costs and a longer route via the Mediterranean, Gibraltar, and around the Cape of Good Hope, which may cost Asian buyers about $10 million extra per shipment or $5 a barrel. However, Saudi Aramco declined to comment on this matter.