Saudi Aramco handles September Asia crude allocations on ad hoc basis, sources say

• Saudi Arabia cut its September price for Arab Light crude to Asia to a six-year low to attract demand amid the supply disruptions
• Saudi crude shipments to Asia fell below 3 million barrels per day in July 2026, down from 4.9 million bpd shipped in the prior year
• Saudi Arabia offered alternative loading from Egypt's Sidi Kerir port, but Asian buyers are reluctant due to longer voyage times and higher freight costs

SUMMARY

Saudi Aramco is managing September crude oil allocations to Asian customers on an ad hoc, case-by-case basis following significant disruptions to Middle East exports caused by regional hostilities. The shift marks a departure from the company's standard monthly allocation process, typically completed around the 10th of each month.

Key Developments:

Four Chinese buyers reported not receiving their September allocations as of mid-August, with volumes now being negotiated individually. One Indian refiner received full allocation but considers it conditional due to vessel procurement uncertainty.

The disruptions stem from attacks around the Strait of Hormuz and Red Sea. The Houthis declared a maritime embargo against Saudi Arabia on July 20, subsequently attacking Saudi-linked tankers and oil facilities at Yanbu and Jazan refinery.

Market Impact:

• Saudi Arabia reduced its September official selling price (OSP) for Arab Light crude to Asia to a six-year low to stimulate demand
• Saudi crude shipments to Asia fell from 4.9 million barrels per day (bpd) in 2025 to below 3 million bpd in July 2026
• Shipowners are reluctant to enter the Strait of Hormuz or Red Sea to load from Saudi's main export ports

Alternative Solutions:

Saudi Arabia offered additional crude loadings from Egypt's Sidi Kerir Mediterranean port, but Asian buyers resist due to longer voyage times and increased freight costs.

The situation significantly impacts global oil markets, as Saudi Arabian shipments to Asia serve as a crucial indicator of demand from the world's largest oil-importing region. The ongoing hostilities and vessel security concerns create substantial supply chain uncertainty for refiners purchasing Saudi crude on a traditional free-on-board basis.