Aramco Redirects Oil Exports Through Egyptian Pipeline Amid Rising Houthi Threats

Saudi Arabia's state-owned oil company Aramco has rerouted its crude oil exports through Egypt's SUMED pipeline to avoid escalating Houthi threats in the Red Sea. The move adds cost, complexity, and transit time to one of the world's most critical energy supply chains.

The SUMED pipeline can handle about 2.5 million barrels per day, but it is not enough to absorb all of Saudi Arabia's typical exports through the Red Sea. To supplement this route, Aramco has also been using the East-West Pipeline, which carries crude and refined products from eastern Saudi Arabia to the Red Sea port of Yanbu.

However, the combined capacity of these alternative routes still falls short of what's needed if Red Sea transit becomes fully untenable. Asian refiners are particularly affected by this routing shuffle, as crude loaded at Sidi Kerir on the Mediterranean coast is heading in the wrong direction for Asia-bound buyers. This means that Asian refiners will need to travel west through the Mediterranean, around the southern tip of Africa via the Cape of Good Hope, and then east across the Indian Ocean.