Saudis Evade Houthis
Saudi Arabia is using tankers to shuttle oil north to evade attacks by Iran-backed militants
Saudi Arabia is exporting crude oil from the Red Sea via a safer northern route to avoid attacks by Yemen-based Houthis. According to Bloomberg, state-owned Saudi Aramco has increased exports from ports in the Mediterranean Sea after the Houthis started targeting ships loaded at the Red Sea export terminal at Yanbu.
Evading the Bab el Mandeb Chokepoint
Shipowners such as Sinokor Group are helping Saudi Arabian crude exit the Red Sea via the northern route. Vessels controlled by South Korea's Sinokor, Greece's Dynacom, and Norway's DHT Management AS have been shuttling cargoes from Yanbu to Ain Sukhna, where oil is discharged and piped north. This move allows Saudi Aramco customers to pick up crude directly at Sidi Kerir instead of Yanbu.
Tanker Movements
The shuttling tankers, along with Saudi-controlled and commercial vessels, have helped sustain oil flows and keep global markets supplied. Xavier Tang, senior market analyst at Vortexa, says that tanker operators with higher risk tolerance have entered the trade, facilitating shuttle tanker movements between Yanbu and Ain Sukhna. According to data from Kpler, Saudi crude exports via the northern Red Sea have increased by about a third since the Houthis announced their blockade on July 20, to about 1.1 million barrels a day.
Impact on Trade
At least four tankers have completed the journey from Yanbu to Ain Sukhna twice or more with cargo, transferring about 16.3 million barrels, according to ship-tracking data compiled by Bloomberg. However, Saudi crude shipments via the Mediterranean mean tankers have to sail around southern Africa to reach the kingdom's main customers in Asia, adding weeks to the journey. As reported by gcaptain, some shipowners and charterers are still risking the journey through the Bab el Mandeb Strait near Yemen.
The rerouting of oil shipments has significant implications for the logistics of oil transportation, with the East-West pipeline playing a crucial role in keeping oil flowing. The situation is being closely monitored by industry experts, including Lori-Ann LaRocco, who notes that the strong undertow of political bluster and lack of data have transformed the flow of trade in the Middle East. The exact details of the tanker movements and oil exports are being tracked by various sources, including Bloomberg and Kpler, which provide valuable insights into the impact of the Houthis' blockade on Saudi Arabia's oil exports.
