Saudi Arabia Turns to Suez as Oil Routes Face Disruption

Saudi Arabia is increasingly relying on the Suez Canal to export oil after disruptions affected both of its main routes – the Strait of Hormuz and the Bab el-Mandeb strait. Riyadh has used the Suez route before, but not as a main export outlet for decades.

In February, Saudi Arabia rerouted most of its exports from the Persian Gulf to Red Sea ports after the US-Iran war disrupted shipping through the Strait of Hormuz. Houthi attacks on ships in the Red Sea this week have now made that route unsafe, prompting the kingdom to send oil through the Suez Canal.

For major customers in Asia, this means significantly longer transit times. The journey from the port of Yanbu to Taiwan via Bab el-Mandeb takes about 19 days, while the route through the Suez Canal, the Mediterranean, the Strait of Gibraltar and around the Cape of Good Hope takes 48 days. According to Reuters calculations, fuel expenses would more than double, while passage through the Suez Canal alone would add about $1m in fees.

According to Energy Aspects, Saudi Arabia could route some of its oil through the Sumed pipeline, which connects the Red Sea with the Mediterranean. It can transport up to 2.5 million barrels per day, compared with total Saudi exports of about seven million barrels per day.

(Reuters, lud)