Saudi Arabia is facing fresh complications in moving its crude to international markets after the kingdom temporarily stopped a major oil pipeline, while the reported Houthi takeover of a strategic island has increased concerns over an important route connecting the Red Sea to Asia.
The 1,200-kilometre East-West pipeline, which can transport about seven million barrels of crude daily, carries oil from Saudi Arabia’s eastern fields to Yanbu on the Red Sea coast.
The Saudi Energy Ministry said the pipeline was temporarily shut as a precaution following drone attacks on the kingdom on September 10, according to Reuters.
Authorities have not disclosed when the facility will resume operations, the Financial Times reported.
The timing has heightened concerns because Saudi Arabia has been relying more heavily on Yanbu since instability around the Strait of Hormuz made traditional shipping routes more difficult.
Recent estimates from shipping trackers and analysts cited by Reuters indicated that the pipeline had been carrying between four million and five million barrels of crude a day before the shutdown.
That represents roughly four to five per cent of worldwide oil supply, although Saudi Arabia could limit the immediate effect through stored crude, other export terminals and alternative arrangements if the closure is short-lived.
The kingdom’s oil sector was already under pressure before the latest incident. The International Energy Agency estimated that Saudi crude production fell by 2.3 million barrels per day in August to six million barrels daily, its lowest level in more than 30 years.
Houthi Control Adds To Red Sea Risk
Saudi Arabia’s difficulties are not limited to its pipeline network.
The reported Houthi capture of Mayun, also known as Perim Island, has introduced another complication for vessels using the Red Sea corridor.
The island lies within the Bab el-Mandeb Strait, between Yemen and the African coastline, and separates two maritime channels.
The reported takeover came after Houthi forces captured Mocha and advanced through Dhubab on Yemen’s Red Sea coast.
Bab el-Mandeb is only about 26 kilometres wide at its narrowest point and is one of the world’s key maritime passages. Around 12 per cent of global trade and up to seven million barrels of oil normally pass through the waterway each day.
Although shipping has not completely stopped, control of Mayun gives the Houthis a strategic position from which vessels entering the Red Sea from the Gulf of Aden can potentially be monitored or threatened.
The consequences extend to Africa because Djibouti and Eritrea sit alongside the shipping corridor. Djibouti, in particular, hosts military facilities belonging to the United States, China, France, Italy and Japan.
Egypt Becomes More Important
With the southern route facing greater security concerns, Egypt has become increasingly important to Saudi Arabia’s efforts to keep crude moving towards Asian customers.
Oil from Yanbu can be transported north through the Suez Canal or through the 320-kilometre SUMED pipeline, which links Ain Sokhna on Egypt’s Red Sea coast with Sidi Kerir on the Mediterranean.
Shipping data cited by Reuters showed that Sidi Kerir handled as much as 2.17 million barrels of crude per day during one week in August, with Saudi oil accounting for about 90 per cent of the total.
But Egypt is also exposed to the wider Red Sea crisis. A sustained reduction in shipping through the area could affect traffic heading towards the Suez Canal, which provides the country with a major source of foreign currency.
Tankers Face Long Detours
Asian buyers may have to contend with much longer journeys if the Red Sea route becomes increasingly difficult to use.
One alternative is for tankers leaving Yanbu to travel through Egypt and the Mediterranean, pass the Strait of Gibraltar and then head south along Africa’s western coast before rounding the Cape of Good Hope in South Africa and turning east towards Asia.
The difference in travel time is substantial. Japan’s Idemitsu Kosan said journeys that once took roughly 20 days were stretching to between 50 and 60 days because of diversions, Reuters reported.
Longer voyages mean higher fuel consumption, increased tanker utilisation and potentially greater freight and insurance expenses.
The disruption could therefore increase the importance of African maritime facilities, from Egyptian oil infrastructure to South African ports that provide bunkering services.
Two Separate Events, One Wider Problem
The drone attack that prompted Saudi Arabia to close the East-West pipeline and the reported Houthi seizure of Mayun are not directly linked.
Saudi Arabia and Iraq have said the drones used in the attack came from Iraqi territory, although responsibility for the strike has not been conclusively established.
Their significance lies in how they affect Saudi Arabia’s available routes for exporting crude.
The pipeline shutdown has temporarily restricted the kingdom’s overland alternative to Hormuz, while Houthi control of Mayun has added another layer of uncertainty to the shortest maritime route from Yanbu towards Asian markets.
Brent crude is already above $100 per barrel, meaning the duration of the pipeline closure and the reaction of international shipping companies to the situation around Bab el-Mandeb could determine whether the disruption remains a temporary setback or develops into a wider threat to global oil flows.
