Strait Crises Force Saudi Oil Tankers on Month-Long, $2.5 Million Detour

Disruptions in the Strait of Hormuz and the Bab el-Mandeb Strait are forcing Saudi oil exports onto much longer routes, adding around one month to shipping times and increasing costs by roughly $2.5 million per tanker, according to Reuters calculations.

Saudi Arabia has increasingly relied on Egypt’s Suez Canal after tensions involving Iran disrupted traffic through the Strait of Hormuz earlier this year. However, recent attacks by Iran-backed Houthi militants in the Red Sea have also made the Bab el-Mandeb route increasingly risky, leaving exporters with fewer safe options.

For Asian buyers, the impact is significant. A tanker sailing from Saudi Arabia’s Red Sea port of Yanbu to Taiwan normally takes about 19 days through the Bab el-Mandeb Strait. If ships instead travel through the Suez Canal, the Mediterranean, the Strait of Gibraltar, and around Africa’s Cape of Good Hope, the journey stretches to 48 days, according to shipping data from Kpler and LSEG.

The longer voyage dramatically increases operating costs. Fuel expenses alone rise from around $1.26 million to $2.87 million, while transiting the Suez Canal adds another $1 million in canal fees, pushing the additional cost per voyage to roughly $2.5 million.

Large crude tankers also face restrictions when passing through the Suez Canal and may have to sail partially loaded before topping up cargo through Egypt’s SUMED pipeline, which links the Red Sea to the Mediterranean.

The pipeline can transport up to 2.5 million barrels per day, compared with Saudi Arabia’s total oil exports of roughly 7 million barrels per day.