Houthi Red Sea Blockade Accelerates Saudi Oil Rerouting via Egypt
Claire Weston
The Houthis have imposed a naval embargo on Saudi Arabia; at least eight VLCCs are now heading for Egypt's Mediterranean port of Sidi Kerir — a systemic reconfiguration of Saudi crude exports that may trigger a new pricing mechanism for Asian buyers.
What exactly have the Houthis done?
The Houthis declared a naval embargo on Saudi Arabia on May 20, warning that any vessel trading with Saudi ports could face military strikes.
Over the past 48 hours, the group says it attacked three Saudi tankers and launched drones against Saudi Aramco infrastructure at Yanbu and Jizan.
Yemen's government warned the Houthis may try to "follow Iran's model" and seize control of the Bab el-Mandeb strait. This means → the chokepoint at the southern mouth of the Red Sea is shifting from harassment-level risk to potential full blockade.
How is Saudi crude being rerouted?
The normal path: Saudi eastern oil fields → cross-country pipeline → Red Sea port of Yanbu → tanker to Egypt's Red Sea port of Ain Sukhna → SUMED pipeline — a land-based oil link connecting the Red Sea to the Mediterranean — → Sidi Kerir port for reloading → onward to Europe or Asia.
What is changing: Saudi Aramco is ramping up exports through Sidi Kerir. At least eight VLCCs — very large crude carriers, each holding roughly 2 million barrels — are heading for the port, with arrivals expected over the coming weeks through mid-August.
Yanbu port showed no tankers berthed as of Tuesday morning. In plain terms = crude is draining out of the Red Sea shipping lane and into Egypt's overland pipeline system; Yanbu is emptying out.
Which shipping companies are running this new route?
South Korea's Sinokor Group accounts for five of the eight VLCCs heading to Sidi Kerir. The company has been one of the most active VLCC operators in the Strait of Hormuz since the Middle East conflict escalated.
The Marshall Islands-flagged Bidbid is also bound for Sidi Kerir, expected to load crude for Asia.
VL Bright and Taga both cancelled planned U.S. voyages and diverted to Egypt; Taga had been running the Japan route almost exclusively for months. This reflects a system-wide reallocation of tanker capacity, not isolated schedule changes.
What does this mean for oil prices and buyers?
Saudi Aramco is studying a new pricing mechanism for crude shipped via Sidi Kerir to Asia, designed to pass through the higher transport costs of the reroute.
This means → Asian buyers may see Saudi crude prices rise — not because the barrel itself costs more, but because the freight structure has changed.
Whether this Egyptian detour stays temporary or becomes permanent depends on whether Red Sea shipping risk eases as the conflict evolves. Put simply = if the Houthi blockade persists, this is no longer a detour — it is the new default route for Saudi crude exports.
Content is for reference only, not financial advice.