Asian refiners are resisting Saudi Aramco's request to load crude at Yanbu, a Red Sea port, citing the difficulty of securing ships willing to navigate the increasingly dangerous waterway. This comes after Iran-backed Houthi militants escalated attacks on tankers and energy infrastructure in the Red Sea region, raising significant risks for shipowners and expanding the conflict in the Middle East. Yanbu had become a critical point for Saudi Arabia to maintain crude exports after earlier disruptions affected traffic through the Strait of Hormuz.
The Houthi actions have led to a substantial decrease in crude oil loadings from Saudi Arabia's Red Sea coast, following their declaration of a "maritime embargo" against the kingdom on July 20. This embargo specifically targets Saudi-linked tankers attempting to transit the Bab al-Mandeb strait at the southern end of the Red Sea. Consequently, Saudi Arabia has rerouted all crude exports destined for Asia through the Suez Canal. This alternative route significantly extends transit times, adding roughly 30 days compared to the Bab al-Mandeb strait, which drives up costs for Asian buyers.
The Houthis claimed responsibility for missile and drone attacks on Saudi Aramco facilities in Jizan and Yanbu. While not confirmed by Saudi Arabia or Aramco, if verified, these would be the first direct attacks on the kingdom's oil infrastructure since 2022. Yanbu's export terminal handled 92% of Saudi Arabia's seaborne crude exports in June, making it a critical vulnerability. The East-West Pipeline, which feeds Yanbu, was a crucial safeguard, allowing crude to bypass the Strait of Hormuz, but now both major chokepoints are under threat, creating a "double chokepoint scenario" that could severely impact energy markets.
The Houthi campaign has caused significant disruption to oil flow and container shipping. Before their campaign, Bab al-Mandeb carried an average of 9.3 million barrels per day (bpd) in 2023, which dropped to about 4.2 million bpd in the first half of 2025. Flows only partially recovered to 7.4 million bpd in June after Saudi Arabia rerouted crude to its Red Sea terminals. The 2023-25 attacks saw over 100 vessels targeted in the Red Sea, forcing more than 2,000 ships to reroute via the Cape of Good Hope and costing the Suez Canal about $6 billion in revenue in 2024. The shift to the Suez Canal involves higher costs, with chartering two Suezmax tankers for this route costing approximately $2 million more than a single VLCC through Bab al-Mandeb, due to the need for an extra vessel and longer voyage times.
