Saudi crude exports slide 460,000 bpd on dual shipping threats

Saudi Arabia's crude exports fell to 4.19 million barrels per day in July, down 460,000 bpd from June, as Houthi threats and the US-Iran conflict disrupted shipping through two key chokepoints. When cargoes loaded but stuck inside the Persian Gulf are counted, the actual reduction was about 230,000 bpd, according to Bloomberg tanker tracking data.

"The Houthis have completed preparations to attack shipping, including the deployment of missiles and drones," the Joint Maritime Information Center, a global naval security monitoring body, warned in an alert late Tuesday. Several shipowners also received direct email warnings from Houthi rebels telling them not to call at Saudi ports, prompting immediate routing changes across multiple vessels.

The disruption is visible in vessel movements. Only three commodity vessels transited the Strait of Hormuz on Tuesday — the lowest daily count since early May — with no observable traffic early Wednesday, per Kpler tracking data. In the Red Sea, LPG tanker Gas King reversed course north toward the Suez Canal after loading at Yanbu, while supertanker New Explorer, carrying Saudi oil bound for Singapore, idled with its status listed as "not under command." Bab el-Mandeb traffic fell to 18 vessels on Sunday from 27 on Saturday and 28 on Friday.

The stakes are high for global energy supply. Saudi Arabia had been exporting record volumes from its Red Sea terminals — 5.9 million barrels per day from Yanbu in the week ending July 17 — and Brent crude futures have risen more than 25 percent this month as traders price in supply risk. Saudi Aramco also shut down its 400,000-barrel-per-day Jizan refinery on July 27 following a Houthi attack.

Tankers reroute or halt as threats spread across two chokepoints

The Houthi maritime embargo, declared July 20, has forced Saudi Arabia to rethink its export logistics. The kingdom had shifted record volumes onto the 7 million bpd Petroline pipeline to Yanbu after Iran effectively paralyzed Strait of Hormuz traffic in March. Yanbu exports surged to about 2.47 million bpd that month, a 330 percent jump from pre-war levels, according to Windward data. By June, loadings had fallen to around 2.39 million bpd, down 41 percent from the March peak.

Now the Red Sea route itself is under threat. VLCC Desh Vaibhav, carrying 2 million barrels of Saudi crude, crossed the Bab el-Mandeb over the weekend heading to India's Sikka port, where Reliance Industries typically receives crude. Suezmax tanker Lesvos, carrying about 1 million barrels, also exited the Red Sea — both with AIS transponders switched off, according to Kpler data. The UK Maritime Trade Operations agency has reported three more tanker attacks since Saturday.

Not every operator has stayed put. Tanker Xin Long Yang initially paused and reversed course after its owners received the Houthi email warning but has since returned to its original southward route toward Bab el-Mandeb. The calculus is shifting by the hour, and the number of vessels willing to proceed could shrink fast if the security picture deteriorates further.

Saudi export options narrow as SUMED capacity caps rerouting

With the southern Red Sea route effectively blocked, Saudi Arabia's remaining maritime option is to sail north through the Suez Canal or feed crude into the SUMED pipeline to Egypt's Mediterranean coast. But SUMED has a capacity of only 2.5 million bpd, and other countries have reserved some of that capacity. The Suez Canal can handle only about 1 million bpd of additional oil flows. Windward has tracked at least three Saudi VLCCs moving crude from Yanbu to Egypt's Ain Sukhna port, where it feeds into SUMED, with tankers sailing in dark mode until approaching Suez.

The constraints mean Saudi oil flows will likely shrink further in the coming weeks unless the Houthis lift their blockade. Saudi oil production is already down as much as 25 percent in the second quarter, though higher prices have cushioned the blow — oil revenues rose 28 percent from the first quarter, and Brent crude has gained 47 percent since the start of the year. The kingdom's budget deficit has narrowed considerably as a result.

There are tentative signs of relief. Oman has presented Iran with a plan, backed by Gulf states, to manage the Strait of Hormuz including collecting voluntary fees for its use, according to a Gulf source and a Western diplomat cited by Reuters. Tehran has yet to respond. ING analysts reported that Hormuz tanker crossings, while still in single digits, have picked up moderately from earlier lows.

For Asian buyers, the disruption is immediate. India's Reliance Industries and other refiners that depend on Saudi crude face longer voyages, higher freight costs, and potential supply gaps if tanker traffic through both chokepoints remains suppressed. Some vessels are still moving, some are waiting, and a few have already changed course entirely — the full extent of the disruption is still unfolding.

This article is for informational purposes only and does not constitute investment advice.