Egypt has offered to ship Saudi crude to the Mediterranean from Yanbu via the Sumed pipeline that runs from Ain Sokhna to Sidi Kerir, a government official tells EnterpriseAM. With Hormuz effectively closed by ongoing hostilities and ins. premiums rising, Saudi is facing a major rethink of regional logistics. It’s still unclear the volume of supply Saudi could ship through Yanbu.

The pipeline isn’t a like-for-like replacement for Hormuz: Its capacity is much lower, former Oil Minister Osama Kamal tells EnterpriseAM. Instead, “Sumed could provide a temporary solution” to help Aramco fulfill its contracts with European offtakers, former Egyptian Natural Gas Holding Company head Medhat Youssef told us.

Cargo owners are also testing a workaround via Egypt for non-oil goods. The proposed route would turn us into a temporary logistics bridge between Europe and the GCC, with goods arriving at Mediterranean ports including Alexandria and Damietta, moved overland to Safaga on the Red Sea, and then onward by ferry to Saudi Arabia and other Gulf markets, Arab Academy for Science, Technology, and Maritime Transport Vice President Mohamed Daoud tells EnterpriseAM.

The news comes as KSA’s major crude oil storage sites are quickly filling up, geospatial analytics company Kayrros Co-Founder Antoine Halff said. Four out of six tanks at the Ras Tanura refinery are already full, and the Ju’aymah terminal on the country’s east coast is “quickly running out of space,” he added.

A 25-day countdown started on Monday, marking the time GCC oil producers have before they run out of storage space, according to analysts at JPMorgan. If the strait remains closed beyond this window with limited alternative routes available, producers may have to stop output entirely because there will be nowhere left to store the oil.

Why this matters: While the war will eventually come to an end, and the Hormuz Strait will reopen, Saudi Arabia and its Gulf neighbors have been dealt a tough lesson on the importance of diversifying supply chains. The question is whether GCC countries will view investment in Egyptian port infrastructure, along with pipeline and cargo infrastructure bridging the Red Sea, as national security priorities when Iran’s drone and missile attacks end.

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