Saudi reroutes oil as Hormuz shuts, prices surge on war fears

Saudi Arabia lifted crude exports from Yanbu to around 4.6 million barrels per day (bpd) last week, approaching the port’s 5 million bpd limit, as shipments were rerouted away from the Strait of Hormuz amid the US-Israeli war with Iran, according to data from Kpler and LSEG cited by Reuters.

Saudi Aramco, the world’s largest oil exporter, has been moving crude through its East-West pipeline to maintain supplies while the conflict has effectively closed the Strait, the company said on March 10.

Yanbu volumes surge toward capacity

Exports from Yanbu climbed to about 4.6 million bpd last week, close to the port’s maximum capacity of roughly 5 million bpd, according to Kpler and LSEG data.

In the week beginning March 16, shipments were near 4 million bpd, underscoring a rapid increase in flows.

According to Kpler, Asia accounts for more than 80% of Yanbu exports.

Yanbu is currently the only Saudi port capable of shipping crude to other regions, making it central to the rerouting effort.

East-West pipeline underpins the workaround

To offset the effective closure of the Strait of Hormuz, Aramco has been pumping crude through its East-West pipeline to supply Yanbu, ensuring export continuity.

The company said it can transport up to 7 million bpd through the pipeline, with around 5 million bpd available for export and the remainder supplying domestic refineries.

This capacity provides headroom for Saudi Arabia to sustain near-maximum shipments from Yanbu while Gulf routes remain constrained by the conflict.

Escalating conflict drives oil prices higher

Oil prices extended gains on Monday following a sharp escalation in the Middle East conflict over the weekend, as Yemen’s Iran-aligned Houthi group launched its first attacks on Israel since the start of the US-Israel war with Iran.

The widening conflict, involving the US, Israel, and Iran, showed little sign of de-escalation, with Tehran signaling readiness for potential US ground troop deployment.

The Houthis said they fired missiles at Israel and warned of further strikes, raising concerns over risks to shipping in the Red Sea.

Meanwhile, the US deployed 3,500 troops aboard the USS Tripoli, while Israel reported strikes across Tehran.

Brent crude traded around 2.6% to $113.23 per barrel, after earlier touching $116.43, while WTI rose to around $101.

Persistent supply disruptions—including Russian export losses of roughly 2 million bpd—have compounded market tightness, with limited scope for rapid US shale output growth despite higher prices.

Bottom line

Saudi Arabia is relying on Yanbu and the East-West pipeline to sustain crude exports as the Strait of Hormuz remains effectively shut, with flows nearing the port’s 5 million bpd capacity.

At the same time, escalating geopolitical tensions and widening supply disruptions—including risks to Red Sea shipping and losses in Russian exports—are driving oil prices higher, reinforcing market tightness.

With limited scope for a rapid supply response, particularly from US shale, the current rerouting efforts and elevated risk environment are likely to keep prices supported while Asia continues to absorb the bulk of redirected Saudi crude.