Saudi Red Sea Exports Plummet Amid Regional Tensions

Saudi Arabia's crude oil exports through its East-West pipeline to Yanbu on the Red Sea have declined significantly since March, according to Wood Mackenzie vessel tracking and cargo data. The volumes had peaked at 4.07 million barrels per day (bpd) in March but fell by 41% to about 2.39 million bpd by June.

This decline comes despite Saudi Arabia's efforts to redirect virtually all crude exports through Yanbu, which was seen as a solution to the risks associated with the Strait of Hormuz. However, Wood Mackenzie's data shows that this redirection has created its own set of problems, including a chokepoint in the Bab al-Mandeb Strait.

Analyst Ian Solis from Wood Mackenzie notes that 'Yanbu has its own chokepoint' and that if the Bab al-Mandeb Strait comes under sustained disruption, Asia will lose a major crude supply artery. This week, Yemen's Houthis, allies of Iran, claimed to have struck two Saudi tankers in the Bab el-Mandeb chokepoint, further escalating tensions in the region.

The decline in exports through Yanbu has significant implications for global oil markets, particularly in Asia, which relies heavily on Saudi crude oil shipments. The situation highlights the risks associated with relying on a single or multiple chokepoints in a war zone and underscores the need for diversification in the global energy trade.