23JUN

Saudi Red Sea diesel loadings collapse

3 min read

11:42UTC

Saudi Red Sea diesel loadings fell to roughly 100,000 tonnes since 27 July from about 600,000 the week before, and Turkey turned net importer of European diesel for the first time since November 2022.

← Back to Trump's first Iran paper is an oil licence Jump to analysis ↓

ConflictDeveloping

Key takeaway

Saudi Red Sea loadings collapsed and Turkey turned importer, tightening Mediterranean feedstock and product on one corridor.

Saudi Red Sea diesel loadings fell to roughly 100,000 tonnes since 27 July, against about 600,000 tonnes the week before, and Turkey flipped to a net importer of European diesel for the first time since November 2022, per Argus Media ¹. Turkey normally runs the other way, pushing surplus barrels from its Aegean and Mediterranean refineries into southern Europe. A country that supplies the basin turning round to draw from it removes the region's nearest replacement cargo at the moment it is needed.

Mediterranean refiners take 24% of their imported diesel through Saudi Red Sea ports, against 17% for Northwest Europe ². That import share explains why the pricing separation shows up in the Med rather than at ARA, and it lands twice over: the same corridor carries the crude feedstock those refineries run and the finished cargoes they backfill with, so a disruption tightens both legs in the same week rather than in sequence.

The corridor itself has a measured floor. Tanker transits through Bab el-Mandeb have settled near 7.5 a day for Saudi-linked hulls, down from about 12 in the days between the 20 July blockade declaration and the withdrawal of Lloyd's-market war-risk cover on 24 July, with total crossings down 22% to 37.2 a day ³. This desk logged that transit figure on 30 July , and 7.5 is a floor rather than a waypoint, set by the insurance mechanics rather than by the shooting.

War-risk cover and a war-risk rate are different instruments with different reversal speeds, which is why the floor holds. A rate priced at some percentage of hull value can be argued back down inside a week once the loss record cools. A withdrawal removes the contract for a defined class of vessel, and an underwriting committee has to re-accept that class before an owner will sail it, which is a process with a lead time no diplomatic headline shortens. Freight was tightening ahead of the exclusion rather than because of it: cross-Mediterranean aframax rates had already spiked 198% month-on-month to $151,308 a day . A charterer without an existing placement is now facing a capacity market rather than a price market.

Deep Analysis

In plain English

Saudi Arabia normally ships a lot of diesel to Europe through the Red Sea, but the tonnage it sent in the week after 27 July collapsed to a sixth of the previous week's level. At the same time, Turkey, a country that usually sells diesel to Europe, had to start buying it instead, for the first time since 2022. Both point the same way: fewer tankers are willing to use the Red Sea corridor right now, so cargoes that would normally flow through it are not moving, and countries that relied on that supply are having to look elsewhere.

Deep Analysis

Root Causes

Lloyd's market underwriting committees do not restore war-risk cover for a withdrawn hull class the moment a threat recedes; a class gets pulled after an incident, or a credible warning, and re-accepting it requires the committee to see a sustained calm period.

That restoration typically lags any de-escalation by weeks, not days, which is the mechanical reason a single called-off strike, as in this desk's earlier item, does not immediately restore Red Sea tanker flows even if the underlying threat has genuinely passed.

What could happen next?

Risk
If Saudi Red Sea loadings do not recover within a few weeks, expect further Mediterranean refiners to follow Turkey in flipping from net exporter to net importer of diesel, deepening the regional supply gap.

Source Landscape

This story draws on neutral-leaning sources from United Kingdom

United Kingdom

Primary parallel: The 2024 Red Sea diversions around the Bab el-Mandeb corridor showed the same mechanism at scale: once a critical mass of owners judged the risk-adjusted cost of transit too high, cargoes rerouted around Africa for months, permanently altering freight economics on affected routes even after individual incidents stopped.

Counter-parallel: The 2024 diversions were a full rerouting around the Cape of Good Hope adding weeks to voyage time. Saudi Arabia's collapse in Red Sea loadings looks more like withheld supply than rerouted supply, since the alternative to the corridor for these cargoes is not an alternative route but no cargo reaching the Mediterranean at all.

Consensus view: The Saudi Red Sea loadings collapse reads as owners routing tonnage around the corridor entirely rather than paying escalating war-risk premiums to transit it, a rational response once cover for a given hull class becomes hard to source at any price.

Counter-view: The competing read, which this desk cannot yet test, is whether Turkey's flip to net importer reflects domestic refinery scheduling rather than corridor avoidance. No first-party statement from Turkish maritime officials was obtained either way, and a single month's trade balance should not yet be read as a structural reversal.

Key tension: Whether Turkey's import flip is a durable consequence of Red Sea avoidance or a scheduling-driven blip that will reverse once refinery runs normalise.

Sources:Argus Media

Mentions:Saudi Arabia →Turkey →Bab al-Mandeb →Mediterranean →Argus Media →Cape of Good Hope →Red Sea →ARA →Lloyd's of London →

First Reported In

Update #22 · The premium unwinds; the diesel crack does not

Argus Media· 3 Aug 2026

Read original →

Causes and effects

Caused by

Med aframax freight doubles in a week

Freight already tightening before the loadings collapse compounds the corridor squeeze

Occurred 20 Jul 2026

Read story →

Bab el-Mandeb thins to 7.5 tankers a day

The Bab el-Mandeb transit floor this desk logged 30 July strands the same Red Sea cargoes

Occurred 29 Jul 2026

Read story →

This Event

Saudi Red Sea diesel loadings collapse

Mediterranean refiners lose imported product and Red Sea feedstock on the same corridor at once, and the reversed Turkish trade direction removes the region's usual local backfill.

Led to

Med diesel crack assessed at $91.67

The Saudi Red Sea loadings collapse feeds the Med crack that Argus assessed at a record

Occurred 29 Jul 2026

Read story →

Different Perspectives

Turkiye

Erdogan followed the Pakistani delegation to Jeddah for an instrument that has not been signed. Ankara's entry widens Saudi Arabia's defence architecture beyond the existing Pakistan pact, adding a second non-Gulf military partner mid-conflict.

Oman

Muscat is the corridor's broker but has published nothing about the arrangement Fars describes on its behalf. The account leaves Oman administering outbound traffic only, a narrower role than the shared route its mediation has rested on since 1979.

Pakistan

Islamabad sent Sharif, Munir and Dar to Jeddah to widen a defence commitment it has honoured in cheaper registers since March, when Dar invoked the Saudi mutual defence pact. Jeddah tests whether that hedge becomes a binding trilateral instrument with Turkiye.

United States

Washington rejected the Majlis Hormuz bill outright while CENTCOM's own tally kept climbing to 49 vessels redirected since 14 July. Both instruments tightened in the same week Trump promised the strait would reopen soon.

Iran

Iran's foreign ministry is selling a phased Hormuz corridor through Oman and denying any percentage cargo tariff, while its own Majlis is legislating fines to 20% and a bar on Israeli-linked cargo. The two accounts, from the same government, do not agree with each other.

Saudi Arabia

Riyadh published a target forecast, not an attribution, for the campaign it says the Najran strike previewed. That keeps an Article 51 case available while it formalises a trilateral defence architecture with Pakistan and Turkiye.