Saudi Arabia has sharply increased crude oil shipments through its Red Sea infrastructure, as Iran's blockade on the Strait of Hormuz forces major producers to reroute exports, exposing new bottlenecks and risks across global energy markets.
The kingdom, the world’s largest oil exporter, has moved quickly to activate its east-to-west pipeline system, allowing crude from fields in the Gulf to be transported across the country to the Red Sea coast.
This shift has placed the port of Yanbu at the centre of efforts to bypass what has effectively become a near-total blockade of Hormuz .
State-run Saudi Aramco has ramped up exports from Yanbu in a bid to offset the loss of its primary Gulf route, following Iranian threats to target vessels early after the US and Israel launched their attacks on 28 February .
Open-source shipping data indicates that daily oil landings at the port have more than doubled this month compared to last year’s average, according to trade analytics firm Kpler.
The surge in activity is also visible offshore. Bloomberg reported that at least 27 crude carriers were anchored near Yanbu last Monday, up from just 11 the previous Friday, with vessels waiting to load cargo. This equated to roughly two ships per day last week, double the pace recorded the week before.
However, the rapid scaling-up has exposed the critical limitation of Yanbu’s export capacity as significantly smaller than that of Hormuz.
Despite longstanding efforts by Riyadh to expand the port since its building in the 1980’s, Saudi Petroline’s operational capacity is estimated at around 4.5 to 5 million barrels per day.
This falls far short of the volumes typically transiting the Strait of Hormuz, which handles between 20 and 21 million barrels of oil per day alongside nearly a fifth of global liquefied natural gas (LNG) flows.
The loss of this corridor has driven benchmark Brent crude prices above $110 per barrel, though prices later eased below $100 after Donald Trump announced a five-day delay to potential strikes on Iran’s energy infrastructure on Monday.
The International Energy Agency has described the current situation as the most severe upheaval in oil markets in history.
Saudi Arabia has reportedly informed long-term customers that April allocations will be reduced, offering buyers the choice between accepting smaller volumes or continuing to rely on shipments through the Persian Gulf with the risk of receiving no oil if the route remains closed.
Another limitation is structural, as Yanbu is not equipped to handle LNG exports at scale. Unlike crude oil, LNG cannot be easily rerouted via overland pipelines, leaving gas markets particularly exposed. Risks shift to the Red Sea As flows pivot westward, vulnerabilities are also shifting, with the Bab el-Mandeb strait linking the Red Sea to the Gulf of Aden re-emerging as a potential flashpoint.
Although Yemen’s Houthis have not indicated their intention to enter the current conflict in support of Iran, the group previously targeted commercial shipping in the Red Sea starting in 2023, an escalation that halved oil flows through the corridor and sharply reduced traffic via the Suez Canal.
The fragility of the rerouted system was underscored last week when Yanbu briefly halted loadings after a drone crashed at Saudi Aramco’s SAMREF refinery located within the port. Resulting in minor damage to the facility, Luca Nevola, Senior Analyst for Yemen and the Gulf at Armed Conflict Location & Event Data (ACLED) described the attack as "largely symbolic".
The Houthis had previously targeted Yanbu on five occasions since 2017, the senior analyst at ACLED said, all accompanied by "significant symbolic value", Nevola told The New Arab .
The risk has therefore suppressed traffic through the Red Sea, with companies and insurers still perceiving the transit via Bab el-Mandeb as "high risk"..
Many vessels are opting instead for the longer journey around Africa via the Cape of Good Hope. Major shipping firms including Maersk and Hapag-Lloyd have diverted traffic accordingly, prioritising safety over efficiency despite significantly higher costs and delays.
Despite this, Nevola notes that Saudi Arabia's decision to divert oil exports to Yanbu "suggests a degree of confidence that the Houthis will not enter the conflict".
He notes that although the Houthi leadership has expressed rhetorical solidarity with Iran, it has not made any practical military commitment. Instead, the Houthis have engaged in back-channel talks with Riyadh, with the prospect of Saudi financial support representing "a critical lifeline for a Houthi regime under growing economic strain".
"Weighed against this", Nevola argues, "the costs of entering the war clearly outweigh any potential benefits".
Nevertheless, tensions in the Red Sea have been heightened by the presence of the US aircraft carrier USS Gerald R. Ford.
Iran has previously described the deployment as a threat, warning that logistical hubs supporting the carrier group could become targets, raising concerns about the security of US-linked facilities in the region. Alternative routes fall short Other regional producers are also attempting to bypass Hormuz, though their combined efforts remain insufficient to offset the disruption.
The United Arab Emirates has utilised its Habshan–Fujairah pipeline, enabling crude to be transported directly to the Gulf of Oman without passing through Hormuz.
Iraq, meanwhile, has moved to revive exports via Turkey after Baghdad and Erbil agreed to restart the Kirkuk–Ceyhan pipeline.
Together, these alternative routes used by Saudi Arabia, the UAE and Iraq account for roughly 7.1 million barrels per day, equivalent to just one-third of the typical volume that flows through the Strait of Hormuz.
Even with maximum utilisation of existing bypass infrastructure, the shortfall means that global markets remain heavily constrained, particularly given the continued loss of major export volumes from southern Gulf terminals.
As a result, while Saudi Arabia’s pivot to Yanbu has provided a partial workaround, analysts argue it has also revealed the structural limits of global energy logistics in the face of a prolonged blockade.