Saudi Arabia ramps Yanbu exports toward 5 MMbpd as Hormuz disruption forces rerouting
(Bloomberg) – Saudi Arabia has ramped up crude shipments from Yanbu export terminals on the Red Sea coast as it diverts supplies away from the Persian Gulf and the Strait of Hormuz, which Iran has kept effectively closed since the end of February.
Shutting Hormuz has halted about 15 MMbpd of crude shipments that normally leave the Persian Gulf for world markets. That’s sent oil prices soaring, left refiners scrambling and created shortages of key fuels. Saudi Arabia is one of only two countries in the region that can divert significant amounts of oil to bypass Hormuz, providing a crucial lifeline for supply.
Riyadh aims to boost export shipments from its Red Sea ports to 5 MMbpd, a target within reach. Its East-West pipeline, linking the Abqaiq processing hub to Yanbu, has a nominal capacity of 7 MMbpd. But 2 million of those are required to supply refineries in Riyadh and on the Red Sea coast at Yanbu and Jizan, near the Yemen border, as well as power generation and desalination plants.
Crude shipments for export from the Yanbu South and Yanbu North terminals averaged 4.4 MMbpd in the five days to Tuesday, according to vessel tracking data compiled by Bloomberg. Flows through Yanbu have been rising steadily after the kingdom moved quickly to pump crude through the 746-mile conduit to the Red Sea.
The kingdom’s rerouting efforts have seen it double crude exports from Yanbu in just over two weeks. Even so, the diversions will only be enough to offset about half the lost Persian Gulf shipments this month. Even at target levels, Yanbu exports would still leave Saudi Arabia’s crude exports roughly 2 MMbpd below pre-war levels.
There are about 56 MMbbl of Saudi crude held on tankers that are stuck in the Gulf, according to Bloomberg calculations using ship tracking data. Those cargoes loaded in late February and early March, but have been unable to transit the Strait of Hormuz to the open seas.
At least 40 oil tankers, most of them very large and capable of hauling about 2 MMbbl of crude each, are anchored near Yanbu waiting to take on cargoes, the tracking data show.
Several ships stopped transmitting automated position signals in the Arabian Sea while en route to the Saudi port and may not reappear on tracking systems until they are well clear of the region. This could result in upward revisions to export figures.
Tankers that have loaded since the diversions began have mostly headed to Asia, with shipments to China and India dominating the flow. Cargoes are also bound for South Korea, Pakistan and Thailand. Customers in Japan have been supplied from storage tanks on the island of Okinawa, where the Saudi national oil company Aramco leases storage tanks that can hold 8.2 MMbbl of crude.
In the early days of the conflict, shipments from Yanbu mostly went north to the Sumed pipeline that crosses Egypt to bypass the Suez Canal. Saudi Arabia typically loads crude for its customers in Europe and along the east coast of North America from a terminal at Sidi Kerir on Egypt’s Mediterranean coast.
