The Red Sea is the Strait of Hormuz alternative for Saudi oil, but here’s the problem: Why the Yanbu route may not work & more related News Here

As the Strait of Hormuz remains closed in response to US-Israeli attacks by Iran, disrupting oil trade and the global economy, Saudi Arabia is reportedly offering an alternative plan. But it comes with some caveats, underscoring how important the strait is.

The Saudi regime, firmly on the US side in the war against its age-old enemy Iran, is giving long-term oil customers the option to receive their allocation for the month of April through a Red Sea port called Yanbu, news agency Bloomberg reported on Monday, March 16.

But buyers who choose Yanbu will receive only a portion of their monthly supply. Because there are constraints on how much crude the pipeline can carry to this port, according to traders informed by Saudi state-run oil company Aramco.

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The second option remains via the Persian Gulf, but risks not receiving any supplies if the Strait of Hormuz remains under blockade. Aramco, the world’s largest oil exporter, declined to comment on Bloomberg’s request.

Normally, almost all the oil flows through the front door – what might be called the Strait of Hormuz – towards the Persian Gulf on the east side of the Arabian Peninsula. The strait is a narrow passage between the peninsula and Iran, with the former crossing the water.

It is wide, fast and straight, especially for ships heading to Asia. Customers arrange their own ships, pick up the oil and leave.

Yanbu is the back door, towards the Red Sea. To reach Yanbu, oil must first travel through a 1,200-kilometre pipeline across the country. The capacity of that pipeline is limited, so you can’t push as much oil through the Strait of Hormuz as you can put into it.

In addition, the sea journey from the Red Sea to Asia around the peninsula is longer than in the Gulf region. This increases shipping time and cost.

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That oil was exported in February mostly from the Gulf terminals of Ras Tanura and Juema on the eastern side of the Arabian Peninsula.

Since Yanbu is far to the west, the Saudis have a 5 million barrel-per-day pipeline that runs across the country to Yanbu. But then again, the export capacity at Yanbu port could be even smaller than that, Bloomberg said. Aramco has been increasing shipments through Yanbu since the beginning of the war, which is now in its third week.

The Saudis typically sell all their oil through long-term contracts, with the bulk of it going to Asia.

Sinopec, China’s biggest refiner, is cutting its work pace by 10% due to the shortage, while Japan has started releasing crude from its national reserves. India has got some oil and gas through the strait – Iran says it is closed only to Americans, Israelis and their allies – but even for those finding some relief in between, the future is uncertain. Beyond Asia, some European refiners reported receiving lower contractual amounts of crude from Aramco, the report said.

Iran has shown little willingness for a ceasefire as it continues to target US bases in the Gulf countries, including Saudi Arabia and the United Arab Emirates.

After days of claiming to have “secured” the Strait of Hormuz and then asking for help from other countries, but getting none, Trump said on Monday, “Maybe we (the US) shouldn’t be there at all”.

“I am demanding that these countries come and protect their territory, because it is their territory… They should help us,” he told reporters aboard Air Force One on Sunday night (US time). He clearly used ‘area’ to mean an area of ​​interest.

He argued, “You could make the case that maybe we shouldn’t be there at all, because we don’t need to. We have plenty of oil.”

It came as he said he has demanded that at least seven countries – he did not name them – send warships to keep the key waterway open for oil and gas transportation as Iranian attacks continue to rain down on Gulf countries and the wider region. He is not getting help.