Houthis Threaten Saudi Oil Logistics with Red Sea Blockade

Saudi Arabia's oil logistics face another challenge as Yemen's Houthis threaten a vital waterway, forcing tankers to take longer routes. The kingdom is sending tankers thousands of miles around Africa after Houthi militants announced a blockade of Saudi ports in July.

The narrow Bab el-Mandeb strait near the southern exit of the Red Sea poses a threat to tankers collecting barrels at Yanbu installations on the Red Sea. To avoid this, many Asian buyers have opted for longer routes through the Suez Canal or around Africa, doubling voyages to approximately 17,000 miles.

Saudi Arabia has also started offering Middle East shipments for collection just outside the Arabian Gulf, catering to its Chinese customers. This move suggests that the kingdom might arrange for oil to be shuttled from the Gulf and through a nearby strait near Oman or the United Arab Emirates.