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Red Sea Unlikely to Replace Strait of Hormuz for Oil Trade
Red Sea Emerges as Potential Alternative Route Amid Strait of Hormuz Tensions
The Strait of Hormuz is a critical choke point, handling approximately 20 million barrels of oil daily. Amid rising tensions and shipping disruptions in this narrow waterway, global energy markets are exploring alternative routes. The Saudi port city of Yanbu on the Red Sea coast is one such option. Oil can be transported through the East-West Petroline pipeline, allowing exports to bypass the Strait of Hormuz entirely. Some Saudi shipments are already being redirected through this route.
Limitations of the Red Sea Route for Oil Exports
However, the Red Sea corridor faces several limitations that prevent it from fully replacing the Strait of Hormuz as the world's main oil gateway. First, there is a significant capacity difference. While the Strait of Hormuz typically carries around 20 million barrels of oil daily, the pipeline feeding Yanbu has a theoretical capacity of about 7 million barrels per day, with actual export capacity estimated closer to 3 million barrels per day.
Increased Costs and Persistent Security Risks
Second, logistics costs present another major obstacle. Tanker demand at Yanbu has surged as exporters attempt to maintain supply flows, leading to sharply increased charter rates for large crude carriers operating from the Red Sea, thus raising overall transport costs. Third, security risks remain a concern. Tankers leaving Yanbu must pass through the Bab el-Mandeb Strait, an area affected by attacks on shipping in recent years, merely shifting the risk rather than eliminating it. Finally, shipping routes are also longer for Asian buyers, and domestic demand for Saudi refineries further limits the pipeline's export capacity.
*Source: YouTube: WION (2026-03-17)*
