Saudi crude through Sidi Kerir more than doubles as Houthi threats hit Yanbu-Asia

Saudi crude floods Sidi Kerir as Houthi threats shut down the Yanbu-Asia route: Crude exports from Egypt’s Sidi Kerir more than doubled to around 2.3 mn bbl / d in August from some 1 mn bbl / d in July, with Saudi barrels accounting for most of the increase, Kpler Commodity Research Director Matt Smith told CNBC.

BACKGROUND- 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. Egypt later opened 10 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 Al Mandab after Aramco started offering additional crude cargoes from Sidi Kerir on a spot basis by the end of July.

A workaround replacing the workaround: Riyadh had already redirected crude from its eastern oilfields through the East-West pipeline to Yanbu — the golden route that bypassed the disrupted Hormuz — but the Houthis’ declaration of a maritime embargo on Saudi Arabia last month has now undermined the route from Yanbu through Bab Al Mandab. Saudi crude shipments crossing the southbound route fell almost 90% to 1.3 mn barrels in the first week in August, down from 11 mn barrels in the third week of July, according to Kpler.

How it works: Saudi crude shipped from Yanbu is unloaded at Ain Sokhna, carried across Egypt through Sumed, and reloaded onto tankers at Sidi Kerir, allowing vessels to collect cargo without entering the Red Sea or paying the canal’s tolls. The pipeline also allows fully loaded VLCCs — which sit too deep to cross the Suez Canal — to discharge part of their cargo at Ain Sokhna, transit the canal with a shallower draft, and reload the barrels on the Mediterranean.

A rerouting of trade? Most Saudi crude leaving Sidi Kerir is heading to Europe and the US — rather than making the roughly 25-days-longer voyage around Africa to Saudi’s usual Asian customers. Kpler’s Smith said some Asian buyers appear to be reselling the barrels into the Atlantic market because taking them around the Cape of Good Hope is uneconomic. The knock-on effect could push some West African crude that would normally supply Europe eastward to Asia.

The bigger picture: Egypt’s bypass route is a symptom of a region-wide production hit. Saudi Arabia and Iraq accounted for roughly 72% of the region’s 5.46 mn bbl / d in crude shut-ins in July, according to our own calculations based on the Energy Information Administration’s (EIA) August Short-Term Energy Outlook (pdf). The EIA expects most of that to unwind by early 2027, though not all of it. Even after Gulf production largely recovers, around 600k bbl / d is expected to remain offline through end-2027, Bloomberg reports.

The shut-ins are set to get worse before they get better. The EIA expects regional shut-ins to climb from 5.46 mn bbl / d in July to 6.6 mn in 3Q, as it assumes Hormuz flows stay severely constrained through August before easing from September. Oil moving through the strait averaged just 4.9 mn bbl / d in 2Q, against 21.6 mn bbl / d in 4Q 2025.

Which means the apparent shipping recovery shouldn’t be taken at face value. Real-time volumes through the strait are hard to pin down because vessels are going dark to obscure their movements, the business information service notes, leading to discrepancies among market estimates. Energy Secretary Chris Wright put weekly outflow at around 9 mn bbl / d — which could indicate the gap between the quarterly data and real-time flows.