Saudi Arabia is confronting an unusual energy-security problem, the route it adopted to reduce exposure to the Strait of Hormuz is itself becoming increasingly risky.
After the Iran conflict disrupted Gulf shipping, the kingdom redirected large volumes of crude to its Red Sea port of Yanbu. Now, with Yemen’s Houthis targeting Saudi-linked shipping, tankers are increasingly avoiding the southern Red Sea and moving oil north towards the Suez Canal and Egypt’s SUMED pipeline.
The change is visible in shipping data, but those same data are becoming harder to interpret. Tankers loading at Yanbu are increasingly switching off their Automatic Identification System, or AIS, signals. That means analysts cannot reliably see where every cargo is going, making estimates of Saudi exports diverge sharply.
For an oil market already dealing with disrupted production and shipping, that uncertainty matters almost as much as the physical disruption itself.
Yanbu Becomes Harder To Track
The scale of the tracking problem is clear from the latest estimates. For the week beginning August 3, Vortexa put Yanbu loadings at 2.38 million bpd, compared with 2.71 million bpd a week earlier. Kpler’s estimate was considerably lower at 1.78 million bpd, down from 4.04 million bpd, while AXSMarine calculated 850,000 bpd, up from about 420,000 bpd.
The divergence does not necessarily mean Saudi exports actually collapsed by the amount suggested by the lowest estimate. Rather, it demonstrates how difficult it is to measure shipments when vessels disappear from public tracking systems.
Vortexa said all Yanbu liftings in the week beginning August 3 were conducted “dark”. Kpler estimated that around 70% of Saudi west coast loadings in recent weeks had been conducted without continuous AIS coverage.
That creates a problem for traders, refiners and organisations such as OPEC and the International Energy Agency, which use shipping information to assess supply and forecast market conditions.
Suez Gains Strategic Importance
The response has been to push more Saudi crude northwards.
The Suez Canal provides a maritime route into the Mediterranean, while the SUMED pipeline moves crude from Ain Sokhna on Egypt’s Red Sea coast to Sidi Kerir on the Mediterranean. The latest shipping data show that this corridor is becoming more important for Saudi barrels as vessels seek to avoid the Bab el-Mandeb.
The clearest evidence is Sidi Kerir. Crude and condensate loadings there reached a record 2.17 million bpd in the week before August 12, around 50% above the previous week’s level. Vortexa estimated that about 90% of those volumes were Saudi crude.
This is not simply a change in destination. It reflects a broader reshaping of Saudi Arabia’s export logistics. Earlier in July, Kpler data showed that 75% of Saudi Arabia’s 5.29 million bpd crude and condensate exports were moving through Yanbu, after the kingdom redirected much of its output away from the Strait of Hormuz.
Shipping Costs And Risks
The shift also changes the economics of moving oil.
The Bab el-Mandeb is the southern gateway to the Red Sea. Avoiding it can mean sending tankers north through Suez for markets in Europe and the United States. For Asian customers, however, the calculation is more difficult because a tanker that avoids the Red Sea may ultimately need to sail around the Cape of Good Hope.
Reuters previously estimated that a voyage from Yanbu to Taiwan could take about 19 days through Bab el-Mandeb, compared with roughly 48 days when routed through Suez and then around the Cape of Good Hope. The longer route increases fuel consumption, ties up vessels for longer and can raise freight costs.
War-risk insurance has also increased as the security threat has intensified, while tanker operators are changing their sailing strategies. DHT, a major tanker operator, said most VLCC loadings were increasingly being directed north or northwest rather than through Bab el-Mandeb.
Oil Market Faces Wider Strain
The routing problem comes on top of an already significant supply shock.
The EIA estimated that Middle East production shut-ins averaged 5.5 million bpd in July, representing more than 5% of global oil consumption. It expects shipping through Hormuz to remain severely constrained through August, with flows gradually improving from September, while around 600,000 bpd of regional production could remain offline through the end of 2027.
That makes Saudi Arabia’s current strategy important beyond the kingdom itself. Its ability to keep crude moving depends increasingly on how effectively it can combine pipelines, Suez access, tanker availability and alternative sailing routes.
The immediate lesson for oil markets is that there is no single replacement for a disrupted chokepoint. Saudi Arabia has been able to move significant volumes away from Hormuz, but the security risks around Yanbu and Bab el-Mandeb are now forcing another adjustment.
For refiners, traders and oil-importing economies, the issue is therefore no longer only how much crude is available. It is increasingly about which route can safely deliver it, how long that journey will take and what it will cost.
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