Saudi Oil Shipments Drop 36% as Red Sea Threats Rise
Bab Al Mandeb tensions and a Houthi embargo disrupt key Saudi oil routes.
Saudi Arabia's crude oil shipments through the crucial Bab Al Mandeb strait have dropped by 36% in just two weeks. This decline comes as Yemen’s Houthis announce a maritime embargo against the Kingdom, raising new concerns for regional shipping.
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Why Are Saudi Oil Loadings Dropping?
According to data from tracking firm Kpler, weekly oil loadings from Saudi Arabia's Red Sea ports fell to 6.1 million barrels per day (bpd), down from 9.5 million bpd. Shipments going to Asia and those from the west coast have both seen significant drops.
The decrease follows a maritime embargo declared by the Houthis against Saudi Arabia. This situation has put extra pressure on Saudi Arabia's alternative shipping routes. The Kingdom has been routing a large portion of its oil exports through the west coast port of Yanbu to avoid other regional tensions.
The Importance of the Bab Al Mandeb Strait
The Bab Al Mandeb strait is one of the world's most important shipping routes, carrying about 12% of global trade and 25% of global container traffic. When shipping through this strait is disrupted, it impacts global oil supplies and increases shipping and insurance costs.
"Right now we are facing two pressures on two critical choke points for energy security," said Noam Raydan, a senior fellow at the Washington Institute for Near East Policy.
Experts warn that if both the Bab Al Mandeb strait and the Strait of Hormuz face disruptions, it could create major challenges for Gulf energy exports and international trade.
Global Shipping Companies on High Alert
This is not the first time shipping in the Red Sea has faced challenges. Since late 2023, shipping companies have had to adjust to ongoing tensions. Many major global shipping firms have previously diverted their vessels around Africa's Cape of Good Hope, which adds up to three weeks to travel times and increases costs.
While the full impact of the new embargo is still unfolding, experts note that even the threat of attacks can cause shipping companies to change their routes and raise prices.
For now, oil markets and shipping firms are keeping a close eye on the Red Sea, hoping for stability in these essential trade routes.
AI contributed to the creation of this article.