Aramco is routing extra crude through Egypt as Houthi threats hit Red Sea exports

Aramco turns to Egypt as traditional Red Sea routes face renewed risk: Aramco is offering additional crude cargoes from the Sidi Kerir terminal on a spot basis as Houthi threats put the Kingdom’s exports through Bab El Mandab at risk, Reuters reports. The extra offers supplement Aramco’s term supplies; no volumes or pricing were disclosed. The exposure is substantial: around 80% of the Kingdom’s Red Sea crude exports and 48% of its Red Sea refined-product exports have passed through Bab El Mandab since March, per Kpler data cited by Middle East Economic Survey (MEES).

How it works: Saudi barrels move through Aramco’s East-West Pipeline to Yanbu, before being shipped north through the Red Sea to Ain Sokhna. The crude then crosses Egypt through the Sumed pipeline and is loaded onto tankers at Sidi Kerir on the Mediterranean. Vessels can collect cargo in the Mediterranean — at full capacity — without entering the Red Sea or paying the canal’s tolls.

The Suez canal provides another northbound option but it’s less straightforward: The largest tankers — such as fully loaded VLCCs carrying 2 mn bbl — cannot pass through the Suez Canal due to draft limits, forcing them to offload part of their cargo to get pumped into Sumed before reloading at Sidi Kerir. Estimates of how much they can take through Suez range from 900k to 1.75 mn barrels, depending on the vessel and cargo. That means offloading some 250k-1.1 mn bbl before transiting north. Additionally, tankers repositioning through Suez to load at Yanbu would face the canal’s steep tolls twice — when transiting in to pick cargo and on their way out — while loading at Sidi Kerir avoids both transits.

REMEMBER- Egypt first emerged as a Saudi export fallback in March, when it offered the Ain Sokhna–Sidi Kerir route as a workaround for disruptions at Hormuz. The government later opened ten Red Sea storage facilities to international players, while Sumed continued moving Saudi crude at full capacity after attacks near Yanbu. The latest threat puts the same infrastructure to work as a bypass for Bab El Mandab.

There’s room on paper, but the logistics could get tight. Aramco’s East–West Pipeline pushes some 5 mn bbl / d of crude to the Red Sea for export — but Sumed can move only 2.5 mn bpd of that north across Egypt. Saudi deliveries to Ain Sokhna have averaged around 755k bpd this year, according to MEES. Egypt has some storage capacity to manage temporary surges, with some 18.4 mn bbl available at Ain Sokhna and another 19.5 mn bbl at Sidi Kerir, but storage only smooths congestion; it can’t raise the pipeline’s daily throughput.

The workaround works better for Europe than Asia. Sending Saudi crude north through Egypt before sailing around the Cape of Good Hope stretches a Yanbu–Taiwan voyage to 48 days from 19, lifting fuel costs to around USD 2.87 mn from USD 1.26 mn and adding roughly USD 1 mn in Suez Canal fees, according to Reuters. At least one VLCC has been booked to load from Egypt’s Mediterranean coast for delivery to South Korea via the Cape, marking the first such charter in several years, while a Greek-owned VLCC is heading north from Yanbu to transit Suez without offloading into Sumed, since it is carrying a partial load.

But not everyone is diverting. Two Chinese-owned supertankers carrying Saudi crude passed through Bab El Mandab a few days ago with their transponders switched on, while Western-linked tankers have also crossed the waterway or approached Yanbu with their transponders switched off to reduce the risk of targeting.

Why it matters: The disruption is transforming Egypt from a casualty of Red Sea insecurity into part of the workaround. Past Houthi attacks have reduced Suez Canal traffic and revenues, but the same threat now raises the value of local infrastructure as the only established corridor capable of moving Saudi crude, creating the commercial case for more Gulf investment in storage, terminals, and cross-country infrastructure. And the shift is not limited to oil: Cairo has suspended Advance Cargo Information requirements on Gulf transit shipments moving through Egypt in both directions, clearing a paperwork hurdle for GCC cargo routed overland between Mediterranean and Red Sea terminals under the emerging Europe-Egypt-GCC corridor.