Saudi Arabia Speeds Up Oil Exports from Yanbu, Chasing 5 Million Barrels as Hormuz is Closed

JAKARTA - Saudi Arabia has accelerated the transfer of oil exports to the Yanbu Port in the Red Sea after the Strait of Hormuz was practically closed since the end of February. Arab News, quoted Thursday, March 26 reported, Riyadh is now approaching the target of 5 million barrels per day of Red Sea routes to maintain supplies to global markets.

The disruption in Hormuz halted about 15 million barrels per day of crude shipments that normally leave the Arabian Gulf. As a result, oil prices soared, refineries scrambled for supplies, and a number of fuels began to become scarce.

Saudi Arabia is one of only two countries in the region capable of diverting large volumes of oil without going through Hormuz. This line is supported by an East-West pipeline connecting the Abqaiq processing center to Yanbu. The nominal capacity of this pipeline is 7 million barrels per day, but about 2 million barrels are needed to supply refineries in Riyadh, Yanbu, and Jazan, as well as power plants and desalination facilities.

Data on ship tracking compiled by Bloomberg shows that exports from the Yanbu South and Yanbu North terminals averaged 4.4 million barrels per day in the five days to March 24. Oil flows through Yanbu continue to rise after Saudi Arabia accelerated the flow of supplies to the Red Sea.

But this line cannot cover the entire loss. As reported by Arab News, in more than two weeks, exports from Yanbu have more than doubled. Even so, this shift only covers about half of the volume lost from the Arabian Gulf this month. Even if the target of 5 million barrels per day is achieved, Saudi Arabia's total oil exports are still about 2 million barrels per day below pre-war levels.

Around 56 million barrels of Saudi crude are also still stuck on tankers in the Gulf region. The cargo was loaded in late February and early March, but has not been able to cross the Strait of Hormuz into international waters.

Near Yanbu, at least 40 tankers are waiting their turn to load oil. Most are very large tankers capable of carrying around 2 million barrels per ship. A number of ships also turned off the ship tracking system signal while moving towards the Saudi port, so the export figures could still change.

Most shipments from Yanbu now go to Asia, especially China and India. Supplies also flow to South Korea, Pakistan, and Thailand. Meanwhile, Japanese customers are supplied from stocks in Okinawa, where Saudi Aramco rents tanks with a capacity of 8.2 million barrels. At the start of the conflict, some shipments from Yanbu were also diverted north to the Sumed pipeline in Egypt to serve the European market and the eastern coast of North America.