Saudi Arabia Eyes Northern Route for Red Sea Oil Exports Amid Houthi Threat

Saudi Arabia's oil exports through the Red Sea are under threat from the Houthi maritime embargo, which could disrupt the flow of crude and refined products to Asia. The country's main export terminal in Yanbu can sustainably load around 4.5-4.7 million barrels per day (mb/d) of crude, but most of this oil still passes through Bab el-Mandeb, a key chokepoint in the Red Sea.

According to Kpler data, Saudi Arabia exported around 4.2 mb/d of crude from Yanbu in April, its post-war high, and about 0.4-0.5 mb/d of refined products. However, if Bab el-Mandeb is closed or severely restricted, the country would need to find alternative routes for its oil exports.

One possible solution is to send the oil north through Egypt's SUMED pipeline and the Suez Canal, which could then transport it to the Mediterranean. The pipeline can carry around 2.5 mb/d of crude, but Saudi Arabia would also need to use the Suez Canal, which has a capacity limit of around 1 million barrels per day.

The country already actively uses the Suez Canal to transit refined products, averaging around 423,000 barrels per day so far this year. However, if all of its oil exports were redirected through the pipeline and canal, it would require a significant increase in tanker traffic, which could put additional strain on the system.