Saudi Arabia has sold up to 60 million barrels of crude for September and October loadings via ship-to-ship transfers near the Strait of Hormuz, offsetting the shutdown of its East-West Pipeline after drone strikes. The pipeline outage has cut into Saudi Arabia's main alternative to Hormuz just as Houthi advances threaten the Red Sea route on the other side.
Saudi Arabia is selling as much as 60 million barrels of crude oil from the Ras Tanura port for September and October loadings via ship-to-ship transfers near the Strait of Hormuz, according to Reuters trade sources. Aramco is directing buyers to load at Oman's Sohar port, just outside the strait, as the kingdom works around the shutdown of its main pipeline alternative.
The East-West Pipeline goes down
Drone strikes launched from Iraqi territory near the Iranian border forced Saudi Arabia to shut its East-West Pipeline last week. The 750-mile line normally moves roughly 4 million barrels per day to the Red Sea port of Yanbu, equivalent to about 4% of global oil supply. Reuters reports that Yanbu's available inventories may cover only five to seven days of recent export volumes if the pipeline stays offline, and repair estimates range from a partial restart within days to a full fix taking five to six weeks.
Hormuz becomes the stopgap
With Yanbu constrained, Saudi Arabia has hiked shuttle-shipping back toward Hormuz to keep exports at a workable level. The volumes are being picked up mostly by refiners in China and South Korea, with some cargoes booked for Japan and India. That rebound in Hormuz-bound exports has capped the upside in oil prices despite the pipeline outage, and crude oil markets were positioned for a weekly decline Friday after three straight weeks of gains.
The rerouting matters because Hormuz itself remains far below normal capacity. Flows through the strait fell from 21.6 million barrels per day in Q4 2025 to just 4.9 million barrels per day in Q2 2026, while flows through the Bab el-Mandeb strait rose from 5.4 million to 8.1 million barrels per day over the same stretch. Saudi production itself has fallen sharply, dropping to 6.2 million barrels per day in August from 10.9 million barrels per day in February.
A second chokepoint under pressure
Iran-aligned Houthi forces have advanced along Yemen's Red Sea coast and reached Perim Island, positioning them closer to Bab el-Mandeb at the southern end of the Red Sea — the route Saudi Arabia now needs more than ever to move Yanbu-bound crude to Asian buyers. Roughly 7% of global petroleum supplies pass through that strait. Brent crude settled Friday at $104.61 per barrel and WTI at $100.05, with both benchmarks gaining more than 8% for the week before easing on reports of possible diplomatic talks over Hormuz shipping.
Saudi Arabia built the East-West Pipeline to escape dependence on Hormuz. Now its shutdown has pushed the kingdom back toward Hormuz itself, with its remaining alternative route running straight past a second, rising security risk.
Sources: Reuters, OilPrice.com, Investing.com
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