Houthi threats in Bab Al Mandab are pushing Saudi crude onto the one corridor that still works

The Houthi threat in Bab Al Mandab is pushing more Saudi crude through Egypt: Aramco is offering additional crude cargoes from Egypt’s Sidi Kerir terminal on the Mediterranean 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.

Saudi 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 Mees (pdf).

This is a complex logistics operation. Saudi barrels move through Aramco’s East-West Pipeline to Yanbu, ship north to Ain Sokhna, cross the country via the Sumed pipeline, and load at Sidi Kerir on the Mediterranean. Tankers collect there at full capacity without entering the Red Sea or paying canal tolls. The Suez Canal is the other northbound option, but it’s clumsier: fully loaded VLCCs carrying 2 mn bbl exceed the canal’s draft limits and must offload some 250k-1.1 mn bbl into Sumed before reloading again at Sidi Kerir. Repositioning through Suez likely means paying the toll twice, on the way in and the way out.

There’s room on paper, but things 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 smoothens congestion; it can’t raise the pipeline’s daily throughput.

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.

The workaround favors Europe and punishes 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.

Some aren’t diverting yet, and the way they brave the strait tells you something about how the Houthis are approaching their blockade. 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.