Yanbu Port is blockaded by the Houthi militants; Saudi Arabia resumes 'covert navigation' through the Strait of Hormuz

After the Houthi militants’ maritime blockade severed the Red Sea’s Yanbu Port—the alternative export route—Saudi Arabia has resumed ‘covert navigation’, significantly increasing crude oil shipments via the Strait of Hormuz and shifting to ship-to-ship (STS) transfers in Omani territorial waters offshore to avoid direct transit risks through the Strait. Last week, Saudi Aramco resumed crude loading at Ras Tanura and Juaymah terminals inside the Strait of Hormuz, ending a three-week suspension; concurrently, it began offering STS sales in the Gulf of Oman—near Sohar, Oman—with Arab Medium and Arab Heavy crude as the cargoes. The immediate impact of the Red Sea route’s failure is that part of Saudi exports have been diverted to Egypt’s Sidi Kerir terminal, with this month’s projected shipment volumes to Asia estimated at only about 670,000 barrels per day—sharply down from the previous ~4 million barrels per day exported via Yanbu Port. This adjustment suggests Saudi Aramco may be emulating the UAE, deploying more tankers through the Strait of Hormuz while maintaining exports via STS transfers outside the Strait—but longer distances and higher freight costs are testing the cost-effectiveness and sustainability of this detour. Red Sea exit blocked; alternative routes rendered ineffective To circumvent risks in the Strait of Hormuz, Saudi Aramco had previously rerouted large volumes of crude oil through the Red Sea’s Yanbu Port, with export volumes peaking at around 4 million barrels per day. However, over recent weeks, Yemen’s Houthi militants announced a maritime blockade against Saudi Arabia, rendering this alternative route inoperable. Thereafter, Saudi Aramco shifted supply to Egypt’s Sidi Kerir terminal, yet this month’s projected Asian shipment volume stands at only ~670,000 barrels per day; extended distances and rising freight costs further undermine the feasibility of this detour. Resuming loading in the Strait of Hormuz after a three-week halt

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Layer One: Fewer vessels visible on shipping lanes Data from shipping analytics firm Kpler (Reuters, September 21): Only 17 cargo vessels transited the Strait of Hormuz last weekend, down from 37 the prior week; before the war erupted in late February, the Strait averaged about 125 large commercial vessels per day. On September 19, eight vessels exited the Strait; on September 20, only five did. A cautionary note: We can accurately state that ‘the observable vessel flow has dropped sharply’, but we cannot claim that ‘this is the actual throughput’. A substantial portion of Middle Eastern export tankers switch off their Automatic Identification System (AIS) during transit, making them invisible to satellite and vessel-tracking systems. Reuters itself acknowledges this limitation; U.S. Central Command’s General Cooper likewise stated on September 19 that crude oil, cargo, and LNG transport volumes across the Middle East over the past two weeks were higher than at any time in the past six months—though this assessment, too, remains difficult to fully verify using publicly available shipping data. Thus, the correct interpretation is: publicly trackable vessel flows have collapsed, but actual oil flows have not declined to the same extent—exports via the Strait of Hormuz rebounded to approximately 6.5 million barrels per day in September (per Kpler). Layer Two: The same volume of oil now consumes more ‘vessel-days’ This is the true mechanism behind the current freight-cost surge. The shipping industry describes it precisely as increased ‘tonne-mile’ demand. Previously, a vessel could deliver oil to its destination relatively directly; now, each barrel requires longer voyages, more waiting time, and sometimes even an additional STS transfer. Even if the global daily demand in barrels remains unchanged, the demand for ‘vessels’ rises. How exactly has the voyage lengthened? Pipelines cannot compensate. After the Strait of Hormuz became constrained, Saudi crude originally destined for Yanbu was rerouted via the Red Sea—through Ain Sokhna, across the SUMED Pipeline to Sidi Kerir in the Mediterranean, and then loaded onto ships. Yet this corridor handles only 2.4–2.8 million barrels per day, far below the region’s export potential of 15 million barrels per day. The surplus must sail around the Cape of Good Hope—a detour that substantially extends voyage duration and reduces the number of annual round-trips a vessel can complete. STS transfers consume extra vessel capacity. Saudi Aramco’s current approach is: load crude at Ras Tanura in the Persian Gulf, transit the Strait of Hormuz, conduct STS transfers near Sohar, Oman, and then re-load onto different vessels bound for Asia. This model was first adopted by Abu Dhabi National Oil Company (ADNOC) in April this year; pre-war, STS transfers were virtually nonexistent. Today? According to Kpler, STS loading volumes in the Gulf of Oman are projected to reach ~2.5 million barrels per day in September—up ~79% from 1.4 million barrels per day in August—and account for roughly 40% of total throughput via the Strait of Hormuz. Saudi Aramco plans to move approximately 60 million barrels via this method throughout September and October. STS means each cargo batch incurs additional transfer, waiting, and vessel-switching steps—increasing the vessel resources consumed per unit of cargo. Put more precisely: Demand hasn’t vanished—it has merely shifted the shipping industry’s metric from ‘how many barrels’ to ‘how many barrels × how far’.

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