Asian refiners are looking at alternative routes to transport Saudi Arabian crude after Yemen’s Iran-aligned Houthis threatened a naval blockade against Saudi Arabia, raising concerns over further disruptions to global oil flows.
Shipping industry data showed tankers are considering routes through the Suez Canal and around Africa instead of the usual eastward journey from Saudi Arabia’s Red Sea port of Yanbu towards the Arabian Sea. However, the longer route could add up to four weeks to delivery times while increasing freight and fuel costs, according to analysts and industry experts.
The shift comes as the US-Israeli war with Iran has already disrupted energy shipments, with two tankers carrying Saudi crude to Asia turning back in the Red Sea following Houthi threats. Vessel crossings through the Strait of Hormuz have also declined further in recent days.
A Liberia-flagged tanker, Rodos, which loaded crude at Yanbu and was heading towards India’s west coast, was tracked moving west towards the Suez Canal, according to shipping data from LSEG and Kpler.
South Korean refiner Hyundai Oilbank was also seeking a Very Large Crude Carrier from Yanbu with options to use the Suez Canal and Egypt’s SUMED pipeline, which connects the Red Sea with the Mediterranean Sea.
Matt Smith, commodity research director at Kpler, said, “Changing behavior by tankers tells us that they are taking the threats seriously.”
He added that the disruption comes at a challenging time for Saudi Arabia as crude oil and product shipments through the Bab el-Mandeb Strait reached a record of more than 4 million barrels per day last month.
Reuters
