Saudi Oil Reroutes Hit Capacity and Security Limits
When Iran shut down the Strait of Hormuz, Saudi Arabia quickly redirected its oil flows to the Red Sea. Now, that route has become dangerous because of the Houthi blockade, so Saudi is rerouting to Egypt—and two LNG tankers in the Egyptian port of Damietta just got struck by drones. OPEC’s number-one is running out of options to reroute its oil exports. In early March, after Iran effectively…
Saudi Arabia has been forced to redirect its oil flows to the Red Sea and then to Egypt due to the Houthi blockade of the Red Sea. However, this new route has become dangerous due to drone attacks on two LNG tankers in the Egyptian port of Damietta. With OPEC's top producer running out of options to reroute its oil exports, Saudi Arabia is left with only two maritime routes: the Suez Canal and the SUMED pipeline to Egypt's Mediterranean coast.
While Saudi vessels have moved crude oil from Yanbu to the Egyptian ports of Ain Sukhna and Sidi Kerir, the capacity of the SUMED pipeline and the Suez Canal may limit the country's ability to shift all of its oil flows. With the Houthis not likely to lift their blockade, Saudi oil exports could further decline in the coming weeks, potentially forcing other producers to step up production to fill the gap.
Written by urgent.news from OilPrice's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
