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Saudi Arabia faces Red Sea logistics bottleneck as Bab El Mandab blocks

A sustained Houthi blockade has cut off the Red Sea route that Saudi Arabia has used to shift oil supply if the Strait of Hormuz is threatened, raising the risk of new bottlenecks and higher shipping costs.

Reported · Written up by our desk · Energy

For years, Saudi Arabia’s contingency plan for disruptions in the Strait of Hormuz has relied on sending crude west through the East-West Pipeline to Yanbu on the Red Sea. The idea has been that this rerouting would reassure markets while strengthening Saudi energy security and reducing reliance on the Hormuz route, according to OilPrice.

However, recent developments around the Bab El Mandab, a key passage into the Red Sea, have exposed a weakness in that approach. OilPrice reports the Bab El Mandab has become inaccessible due to a sustained Houthi blockade, meaning the pipeline alone cannot solve the full logistics problem because oil still needs to leave via the Red Sea.

With the Red Sea passage blocked, Saudi Arabia now faces a logistical challenge with broader geopolitical implications. OilPrice notes that a closure could disrupt global oil markets and shift strategic power balances, even as tankers could potentially sail north through the Suez Canal.

OilPrice adds that the Suez route is not a like-for-like replacement, since it was not designed to cover the volume of several million barrels per day of Saudi crude, refined products, and petrochemical exports. While it can take on additional traffic, doing so would likely create new bottlenecks, longer transit times, and higher costs for global energy markets, OilPrice says.

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