Saudi Oil Exports Hit Capacity Limits as Rerouting Fails

Saudi Arabia's oil exports have been rerouted due to security concerns in the Red Sea. After Iran shut down the Strait of Hormuz, Saudi redirected its oil flows to the Red Sea. However, this route has become increasingly hazardous due to the Houthi blockade, forcing Saudi to redirect its shipments again.

The country's main maritime route now is through Egypt via the Suez Canal and the SUMED pipeline. However, this conduit has a limited capacity of 2.5 million barrels per day, making it difficult for Saudi to shift all its oil exports to this route.

Windward data shows that five tankers entered the Strait of Hormuz on July 29, but traffic remains significantly lower than pre-war levels. Meanwhile, crude loadings in progress at Yanbu have declined by 41% from the March peak.