Saudi Oil Rerouted Through Suez Canal Amid Disruptions

Saudi Arabia's oil exports have been severely impacted by the disruption of two key routes - the Hormuz and Bab el-Mandeb straits. As a result, the kingdom has had to resort to exporting oil via Egypt's Suez Canal for the first time in decades.

The majority of Saudi Arabia's oil buyers are now located in Asia, making it necessary for tankers carrying Saudi oil to circumnavigate Africa and add around a month to their journey. This route takes 48 days, compared to the usual 19 days via Bab el-Mandeb.

According to LSEG data, the increased fuel costs alone will amount to $2.87 million, up from $1.26 million. Additionally, crossing the Suez Canal adds a fee of $1 million.

Saudi Arabia had previously rerouted most of its oil exports from the Gulf to the Red Sea after the US-Iran war disrupted shipments via Hormuz in February. However, recent attacks by Houthi militants have made this workaround unsafe, prompting the kingdom to send oil via the Suez Canal instead.