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ConflictSaudi Red Sea crude exports plunge 41% as Houthi threats mount
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Saudi Arabia's crude exports from the Red Sea port of Yanbu have fallen 41% from a March peak of 4.07 million barrels per day (bpd) to about 2.39 million bpd in June, according to Wood Mackenzie vessel tracking data. The decline comes after the kingdom redirected virtually all crude exports through its East-West pipeline to Yanbu at the start of the Iran war, bypassing the Strait of Hormuz. However, analysts warn that Yanbu is now exposed to its own chokepoint risk at the Bab el-Mandeb Strait, where Iran-aligned Houthi rebels have declared a naval blockade and claimed strikes on two Saudi tankers. Wood Mackenzie analyst Ian Solis noted that what appeared to be diversification was merely a shift from one strategic bottleneck to another, as Asia's major crude supply artery faces potential disruption from sustained Houthi attacks.
Source report
Saudi Arabia, which redirected virtually all crude exports through its East-West pipeline to Yanbu on the Red Sea at the start of the Iran war, has seen a sharp decline in shipments from the terminal, according to vessel tracking and cargo data from Wood Mackenzie.
Key Data Points
- Yanbu crude exports in June: ~2.39 million barrels per day (bpd)
- March peak: 4.07 million bpd
- Decline from peak: 41%
- Total Saudi exports in January (Gulf and Red Sea): ~7.96 million bpd
- Decline from January baseline: 66%
Despite the near-total concentration of exports through Yanbu, volumes have fallen steadily from the March peak, WoodMac's tracking data shows.
Analyst Commentary
"For months, the market treated Yanbu as the answer to Hormuz risk," said Ian Solis, data analyst, Tech/Maritime-Ops for Wood Mackenzie.
"The problem is that Yanbu has its own chokepoint. If Bab al-Mandeb comes under sustained disruption from a declared Houthi naval blockade, Asia stands to lose a major crude supply artery," Solis added.
Escalating Threats
This week, Iran-aligned Houthis appeared to make good on their pledge to target Saudi Arabia's oil exports from the Red Sea and the Bab el-Mandeb Strait. Yemen's Houthis, allies of Iran, said late Wednesday they had struck two Saudi tankers in the Bab el-Mandeb chokepoint, claiming the vessels had violated the naval blockade declared earlier this week.
Strategic Implications
The Red Sea oil chokepoint has become critical for Saudi crude shipments after the Kingdom redirected exports that previously shipped from the Persian Gulf. However, the diversification away from the Strait of Hormuz may now mean dependence on another chokepoint in a war zone.
"What looked like diversification was in reality a shift from one strategic bottleneck to another," WoodMac's Solis said.
By Charles Kennedy for Oilprice.com
Source
OilPrice.com Daily News UpdateWestern
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Saudi Red Sea Crude Exports Plunge 41% as Houthi Threats Mount