Saudi Arabia is moving crude to Egypt's Sidi Kerir port through the SUMED pipeline to keep tankers out of the Bab el-Mandeb Strait, where the Houthis announced a blockade on Saudi shipments last week. At least eight very large crude carriers are signaling Sidi Kerir as their destination, and Bab el-Mandeb traffic slumped to a multi-month low on Sunday. A Reuters poll of economists now sees India's growth at 6.6% as the oil price spike weighs on the economy.
More than half a dozen empty supertankers are sailing to Egypt's Sidi Kerir port to pick up Saudi crude, as the world's top crude oil exporter re-routes its export tactics again to avoid the new threat for the Middle East's chokepoints — the Bab el-Mandeb in the Red Sea. Since the Iran-aligned Houthis in Yemen announced a blockade on Saudi shipments in the southern Red Sea and Bab el-Mandeb Strait last week, Saudi Arabia has shuttled more crude from Yanbu to the Egyptian port of Ain Sukhna on the Red Sea, and then onto the SUMED onshore pipeline to Sidi Kerir.
Eight supertankers signal Sidi Kerir
At least eight very large crude carriers (VLCCs) are signaling Sidi Kerir as their destination, with all expected to arrive in the coming two to three weeks, according to vessel-tracking data compiled by Bloomberg. The Houthi threat, which resulted in attacks on Saudi tankers in the Red Sea last week, has prompted Saudi and Western operators to divert tankers to the Suez Canal in Egypt to bypass the Bab el-Mandeb Strait.
Meanwhile, no observable tankers sat at the Saudi port of Yanbu on the Red Sea as of early Tuesday, though this is likely because tankers have started to switch off transponders en masse to avoid becoming targets of the Houthis.
The long way around Africa
Houthi threats to shipping in the Red Sea and Bab el-Mandeb have already forced at least one oil tanker carrying Saudi crude to Asia to choose the much longer route through the Suez Canal, the Mediterranean, and around Africa. Now the empty supertankers are ready to make the long voyage to Egypt and then potentially to the Cape of Good Hope in Africa, carrying crude oil on to Asia if the situation at the two chokepoints doesn't improve.
But the U.S.-Iran de-escalation hasn't abated operators' fears of running tankers at either chokepoint. Tanker traffic through Bab el-Mandeb slumped to a multi-month low on Sunday, while traffic at the Strait of Hormuz remains subdued at a two-month low.
Reuters poll cuts India's growth view to 6.6%
A Reuters poll of economists now sees India's economic growth at 6.6% in the fiscal year to March 2027, a full percentage-point drop from the 7.7% GDP growth in the prior fiscal year, with the spike in oil prices and slowing private investments weighing on the economy. Some of the nearly three dozen economists surveyed between July 21 and 27 flagged weaker real economic activity than the headline figures have suggested in the past five months since the Middle East crisis erupted.
Sources: Investing.com, Oilprice.com
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