Allocated Is Not Lifted

By Gyula Toth | Physical Constraint Desk | 18 August 2026

South Korea still has aggregate crude cover, but the official posture is tighter than it was in July. At an 11 August cabinet meeting, the government said August crude and naphtha volumes were being secured at 100% or more of the previous-year average, while supply conditions from September onward required additional management. It also planned to reactivate the strategic-reserve crude SWAP within August and pursue an extension of emergency naphtha and petrochemical supply measures.

The shift is toward tighter contingency management even though August supply remained covered.

On 13 August, Reuters reported that a refiner with its full Saudi allocation still described the barrels as conditional because it did not know whether it could lift them. Saudi term crude is typically sold FOB, leaving the buyer to arrange transport. Reuters also reported that few shipowners were willing to enter Hormuz or the Red Sea to load from Saudi Arabia's main export ports.

This applies to buyer-arranged term barrels. Aramco has also sold crisis spot cargoes on CFR terms, and seller-delivered arrangements have been reported as possible.

Reuters reported on 12 August that crude and condensate loadings at Sidi Kerir averaged a record 2.17 million b/d, around 90% of it Saudi crude, based on Vortexa data.

Throughput still leaves the cargo-execution question open. Reuters also reported that all Yanbu loadings in the prior week were conducted with AIS dark, while Vortexa, Kpler and AXSMarine produced sharply different estimates for the same loading system. Sidi Kerir can operate at scale; headline flow data still does not show whether a buyer's cargo will lift.

One PetroChina-chartered VLCC loaded at Yanbu and cleared Bab el-Mandeb, while separate Unipec-chartered VLCCs scheduled to enter the Red Sea and load at Yanbu slowed and circled in the Gulf of Aden instead of entering as scheduled. Public reporting does not state why the decisions differed.

Saudi Arabia set the September Arab Light Asia OSP at $2/b below the Oman/Dubai average. That differential cannot simply be carried onto an Asia-bound Sidi Kerir cargo. The published Saudi Sidi Kerir OSP structure is for Europe and references ICE Brent; no public pricing mechanism for Sidi Kerir cargoes to Asia has been established.

Reuters reported on 14 August that GS Caltex bought 2 million barrels of Mars from Shell for November arrival at about $13-14/b over October Dubai. The transaction basis was not stated.

The procurement choice is narrower than the headline spread: keep waiting on a selected Saudi execution route, or lock an executable replacement barrel now? The paid workbook prices that choice from the buyer's own route, basis, freight, timing, refinery-value and failure-cost inputs.