Saudi Arabia reroutes oil exports amid Red Sea shipping threats

Saudi Arabia is in the middle of a logistical chess game with its oil exports, and the board keeps changing. The kingdom has been forced to reroute crude shipments away from its Red Sea port at Yanbu toward alternative terminals and pipelines as escalating conflicts in the region threaten to choke off traditional shipping lanes.

From Hormuz to Yanbu to everywhere else

The trouble started when Iran effectively closed the Strait of Hormuz following heightened tensions with the US and Israel in March 2026. That waterway had historically carried over 6 million barrels per day (MMbpd) of Saudi crude. Saudi Aramco pivoted quickly, ramping up exports through the East-West pipeline to its Red Sea terminal at Yanbu. Flows through that route soared to approximately 4.4 MMbpd and peaked near 5 MMbpd by the end of March. The pipeline, with a nominal capacity of 7 MMbpd, became the kingdom’s lifeline overnight.

An interim US-Iran deal later eased some of the pressure on the Gulf side. By June, Yanbu loadings had declined to around 2.39 MMbpd as some shipments resumed through traditional Gulf routes via Ras Tanura.

A second front opens

On July 20, 2026, Houthi forces declared a maritime embargo on Saudi shipping and began launching attacks on vessels transiting the Bab el-Mandeb Strait. Saudi crude flows through that corridor dropped sharply almost immediately.

Aramco’s response was to shift more volume northward. Shipments to Egypt’s Ain Sukhna terminal, connected to the Mediterranean via the SUMED pipeline, rose roughly 33% to about 1.1 MMbpd. SUMED pipeline usage surged to over 1.9 MMbpd in August 2026, a dramatic jump from less than 0.65 MMbpd just two months earlier.

The cost of going the long way around

For buyers in Asia, tankers that once sailed south through the Bab el-Mandeb and across the Indian Ocean now have to navigate around the Cape of Good Hope at Africa’s southern tip. That detour adds over 30 days to delivery schedules.

What this means for energy markets

Saudi Arabia produces roughly one in every ten barrels of crude consumed worldwide. The SUMED pipeline’s surge to 1.9 MMbpd in August puts it near operational limits that could constrain further rerouting. For energy-dependent economies in Asia, the extended delivery times mean strategic petroleum reserves become more important as a buffer. Japan, South Korea, and China all maintain significant reserves, but drawing them down is a stopgap, not a strategy.