Saudi Aramco Detours Oil Shipments to Bypass Regional Chokepoints

Saudi Aramco is implementing a costly oil transport detour to bypass the Strait of Hormuz and the Bab el-Mandeb strait following regional instability and Houthi attacks. The new route moves crude west via the East-West Pipeline to Yanbu, through the northern Red Sea to Egypt, and across the SUMED pipeline to Sidi Kerir before traveling around the Cape of Good Hope to reach Asian markets.

This logistical shift increases transit time from 19 to 48 days and adds approximately $5 per barrel in freight, fuel, insurance, and pipeline charges. Because standard Asian official selling prices no longer reflect these costs, the company is considering a separate pricing mechanism for crude loaded from Sidi Kerir.

Despite the increased expense, the strategy maintains supply reliability, which the company reported at 98.4% in the second quarter of 2026. To further enhance export resilience, the Government of Saudi Arabia is considering expanding the capacity of the East-West Pipeline by up to 2 million barrels per day.