Looking for new routes

Tankers looking for new routes amid widening Middle East conflict

By Tim Lister and Eleni Giokos

The shipping industry is looking for new options after the recent declaration by the Iranian-backed Houthis that Saudi ships trying to reach the Indian Ocean would be targeted, according to analysts.

A number of tankers are using the northern route out of the Red Sea through the Suez Canal or loading oil at Sidi Kerir on Egypt’s Mediterranean coast, where crude arrives through a pipeline from Saudi Arabia, according to shipping data.

“Saudi Arabia’s crude export routes are proving more resilient than expected,” according to Amena Bakr at maritime analysts Kpler.

“Rising Sidi Kerir loadings suggest greater use of the Suez-SUMED (pipeline) system,” Bakr noted Tuesday in a post on X. Even so, the Egyptian route “cannot 100% replace Bab al-Mandeb for crude exports to Asia,” she added.

The Houthis declared a naval blockade against Saudi Arabian ports on July 20 and have since claimed to have struck three Saudi tankers — the latest unconfirmed attack being on Tuesday.

Transits of the Bab al-Mandeb have fallen by 22% since the Houthi blockade was announced, according to maritime intelligence group Windward, from about 48 to 37 a day. Windward also noted that war-risk insurers are now excluding vessels with any Saudi port history from Red Sea coverage.

Transits through the Strait of Hormuz remain at very low levels, with the southern route supported by the US military seeing virtually no traffic, according to Windward.

“Hormuz recorded zero tanker crossings in either direction on Monday,” it said.

Crossings were higher on Tuesday, according to Kpler, with 12 confirmed transits, six leaving the Gulf and six entering. It noted the continued trend of ships using the Iranian corridor, which accounted for 10 of the 12 crossings.

“Saudi Arabia has the infrastructure to keep crude flowing, but every diversion comes at the cost of longer voyages, higher freight rates and greater operational complexity,” noted energy consultants MEES Wednesday.

“As the conflict spreads across multiple maritime fronts, resilience is becoming increasingly expensive — even if oil markets have yet to fully reflect that reality,” it said.