Saudi Arabia Overhauls Oil Logistics Amid Houthi Tanker Threats

The Government of Saudi Arabia is overhauling its global oil logistics after Houthi militants in Yemen threatened tankers in the Bab el-Mandeb strait. To bypass the dangerous waterway, the kingdom is shuttling crude north across the Red Sea to the Sidi Kerir port in Egypt or offering shipments for collection in the Gulf of Oman.

These workarounds have severely impacted Asian buyers, often requiring tankers to sail around Africa. This route more than doubles voyage distances to approximately 17,000 miles, increasing delivery costs and keeping overall Saudi exports below pre-war levels. While some East Asian refiners are considering dropping orders due to these expenses, Japanese and South Korean refiners continue collections to ensure energy security.

European refineries have largely maintained their full allocations for September despite the logistics strain. Aramco continues to manage crude allocations and has requested that refiners collect cargoes from Yanbu, while shipping firms like Sinokor assist in shuttling cargoes from the west coast and transporting crude from Saudi gulf ports.