July 28, 2026
Bloomberg: Tankers Divert to Egypt as Houthi Threat Upends Red Sea Trade
Saudi Arabia is increasingly routing crude exports through Egypt’s Sidi Kerir terminal as Houthi attacks in the Red Sea reduce traffic at its Yanbu export hub and raise shipping and insurance risks. At least eight VLCCs are scheduled to load Saudi crude via the SUMED pipeline route, allowing exports to bypass the Bab Al-Mandab Strait. While Chinese and Iran-friendly vessels continue using the southern Red Sea route, many Western and Asian shipowners are opting for longer, costlier alternatives.
Figure 1 shows trends in Saudi crude oil exports from Western ports. Historically, most of it went to Egypt, where it is shipped via the SUMED pipeline to Sidi Kerir and from there to Europe. After the partial closure of the Strait of Hormuz, Aramco diverted crude via the East-West pipelines and began exporting to Asia through the Bab Al-Mandab. Since the Houthi threat and the cancellation of war-risk coverage by Lloyd’s and its affiliates, exports to SUMED and through the canal have increased, as shown in Figure 1. Below is a discussion that answers two questions: 1. Can Saudi Arabia reroute all its exports via the Northern Red Sea? 2. What are the limitations and difficulties? 3. What are the implications for the oil market? (See answers below.)
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