Key takeaways:
- Saudi Aramco is rerouting crude exports through Egypt’s Sidi Kerir port
- At least eight very large crude carriers are set to arrive at the Egyptian port through mid-August
- The shift follows a Houthi strike on a vessel in the Red Sea last week
Saudi Aramco is rerouting oil exports through Egypt’s Mediterranean port of Sidi Kerir, as Houthi attacks in the Red Sea push tanker traffic away from the kingdom’s traditional export routes.
The state-owned oil company has ramped up crude offerings from the Egyptian port after Iran-backed Houthi militants struck a vessel in the Red Sea last week.
At least eight very large crude carriers are now signaling Sidi Kerir, with arrivals expected over the coming weeks through mid-August, according to ship-tracking data.
The shift is visible at the source as well. No tankers were observed at the Saudi port of Yanbu in the Red Sea early Tuesday, though vessels may have picked up cargoes with their transponders switched off to avoid detection. Yanbu became a critical export hub after the Iran war began, allowing Saudi Arabia to bypass the Strait of Hormuz by piping millions of barrels a day to its west coast for export to global customers.
Some shipowners have grown hesitant to sail to Saudi Arabia after several insurance providers began restricting coverage for vessels calling at the kingdom’s ports, citing the risk of attacks, according to ship and insurance brokers.
Which vessels are rerouting
The Marshall Islands-flagged VLCC Bidbid is currently sailing to Sidi Kerir and is expected to pick up its cargo Wednesday for delivery to Asia, shipping data shows.
Two other tankers, VL Bright and Taga, had been heading for the U.S. before abruptly switching course to the Egyptian port, with Taga sailing almost exclusively to Japan in recent months. The remaining five ships bound for Sidi Kerir are controlled by South Korea’s Sinokor Group, a privately held company that has been among the most active operators in the Strait of Hormuz since the Iran war began at the end of February.
Sinokor, Bidbid’s manager Asyad Shipping, VL Bright’s owner Hyundai Glovis, and Taga’s owner Nippon Yusen KK did not immediately respond to requests for comment.
To reach Sidi Kerir, Saudi crude is typically collected at Yanbu, transported to Egypt’s Red Sea port of Ain Sukhna, then pumped north to the Mediterranean export hub via the Suez-Mediterranean Pipeline, known as SUMED.
Why Aramco is rushing to reroute exports
Moreover, Saudi Arabia has moved to export more oil through this northern route after Houthi rebels imposed a blockade and then attacked vessels along the southern route near the Bab el-Mandeb strait.
Traffic through Bab el-Mandeb remained brisk Monday, according to data compiled by Kpler, with ships carrying Russian crude continuing to transit the chokepoint.
Over the past week, only Chinese vessels and ships owned by countries friendly with Iran have continued transiting Bab el-Mandeb, while Western tankers and more risk-averse Asian shippers have opted for the longer, costlier route via the Suez Canal.
In the Strait of Hormuz, observable tanker traffic was scant. Rotterdam Energy, a supertanker controlled by Sinokor, appeared in the Persian Gulf after last broadcasting from the Gulf of Oman, a sign it may have entered the region with its transponder switched off.
