Saudi Arabia Seeks 5 Million-Bpd Oil Reroute as Houthi Threats Push Crude Back Above $100
Updated
Updated · The Economic Times · Jul 27
Saudi Arabia Seeks 5 Million-Bpd Oil Reroute as Houthi Threats Push Crude Back Above $100
3 articles · Updated · The Economic Times · Jul 27
Summary
More than 5 million barrels a day of Saudi crude moving through the Red Sea is at risk, pushing Riyadh to map alternative export routes around the Houthi-threatened Bab el-Mandeb strait.
The fallback would send barrels north instead of south, relying on extra pipeline capacity, the Sumed pipeline and more tankers after Houthi attacks on two Saudi-flagged vessels earlier this week.
25 extra days could be added to a Saudi-to-Japan voyage if cargoes are rerouted via the Mediterranean, sharply raising freight costs and tying up tanker capacity on return trips as well.
Oil has climbed back above $100 a barrel since the attacks, while India, China, Japan and South Korea look most exposed because they take large volumes of Saudi crude loaded from Yanbu.
The 14-nautical-mile Bab el-Mandeb remains passable for some ships, but geography makes any blockade hard to avoid and leaves Saudi Arabia with a far costlier backup than its Hormuz bypass.