Saudi Arabia has increased its oil exports through Egypt, bypassing the Red Sea
Saudi Arabia has increased oil shipments through the Egyptian Mediterranean port of Sidi Kerir, seeking an alternative to routes through the Red Sea amid Houthi attacks on tankers. In August, exports from Sidi Kerir totaled about 2.3 million barrels per day, compared with approximately 1 million barrels per day a month earlier, CNBC reports, citing data from the analytics firm Kpler.
According to Matt Smith, Kpler’s director of commodities research, the majority of these shipments consist of Saudi oil. He believes that the increase in shipments through Egypt indicates a shift in strategy or market conditions, rather than a short-term solution.
The port of Sidi Kerir is connected by the SUMED pipeline to the port of Ain Sokhna on the Red Sea. According to Smith, fully loaded supertankers cannot pass through the Suez Canal. In Ain Sokhna, they transfer approximately half of the Saudi oil cargo to the pipeline, pass through the canal, and then pick up the oil at Sidi Kerir.
Previously, Riyadh had rerouted millions of barrels of oil per day from the eastern region to the port of Yanbu on the Red Sea coast due to traffic restrictions in the Strait of Hormuz, which CNBC attributes to Iran’s actions. At the same time, Houthi attacks on Saudi tankers have created risks for oil exports from Yanbu through the Bab el-Mandeb Strait.
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According to Kpler, the volume of Saudi exports from Yanbu through the Bab el-Mandeb Strait during the week of August 3 fell by nearly 90%—to 1.3 million barrels—compared to 11 million barrels during the week of July 20, when the Houthis announced a maritime embargo against the kingdom. It is difficult to assess the volumes more precisely, as tankers carrying Saudi oil in the Red Sea often turn off their transponders to avoid attacks.
Saudi Aramco CEO Amin Nasser stated during an earnings conference call on August 4 that the company has alternative routes to the Mediterranean Sea via SUMED and the Suez Canal. However, the route around Africa to Saudi Arabia’s main Asian buyers is approximately 25 days longer than the route through the Bab el-Mandeb Strait. According to Smith’s assessment, most shipments from Sidi Kerir are headed to the U.S. and Europe, rather than to Asia.
Rerouting shipments through Egypt does not eliminate all risks: on July 30, drones struck two ships carrying liquefied natural gas in the Egyptian port of Dumyat. No one has claimed responsibility for these attacks.
