The Red Sea Is Becoming Saudi Arabia’s Biggest Oil Bottleneck

The Kingdom’s strategic plan to counter disruptions in the Strait of Hormuz has long been based on an assumption that pump oil west through the East-West Pipeline and use the Red Sea as an alternative outlet. However, current events in Bab El Mandab have blown a gaping hole in this theory, exposing a critical weakness in Saudi Arabia’s energy security.

The East-West Pipeline was always seen as a reliable safety net, but it has its own limitations. Once crude reaches Yanbu on the Red Sea, it must still be transported out of the region. The Bab El Mandab is now inaccessible due to a sustained Houthi blockade, raising serious concerns about Saudi Arabia’s ability to maintain exports in the face of disruptions.

Analysts often suggest that tankers use the Suez Canal instead. However, this option is not as simple as it seems. The Suez route was never designed to handle the volumes currently being transported through Bab El Mandab. Even if it could absorb additional traffic, it would create new bottlenecks, longer transit times, and higher costs for global energy markets.

The East-West Pipeline has a nameplate capacity of around seven million barrels per day, but significant portions of this volume are already used to feed domestic refineries and petrochemical facilities in western Saudi Arabia. The rest must be exported, with Yanbu serving as the Kingdom’s principal export outlet since the Iran war and the Hormuz crisis.

However, this strategic flexibility disappears if the Bab El Mandab is closed or threatened. Every cargo loaded at Yanbu must now choose between going through the Suez Canal for Europe and USA-bound volumes or taking the longer route north through the entire Red Sea before reaching the Suez Canal and eventually returning east towards Asia.

The implications of this are far-reaching. If Saudi Arabia is unable to maintain exports, it could disrupt global oil markets and shift strategic power balances. The Kingdom’s policymakers and strategic planners must reassess alternative routes, diversify export infrastructure, and develop contingency plans to mitigate potential disruptions.

In the past, Saudi Arabia has been praised for its ability to adapt to changing circumstances, but this crisis highlights a deeper vulnerability in the Kingdom’s energy security. The Red Sea bottleneck is not just a logistical challenge; it’s also an opportunity for other oil-producing nations to gain an advantage and challenge Saudi Arabia’s dominance.

As global energy markets continue to evolve, it’s clear that Saudi Arabia’s assumptions about its energy security are no longer tenable. The Kingdom must rethink its strategy and develop new contingency plans to mitigate the risks of disruptions in the Red Sea.