Saudi Arabia Races to Reroute Oil

(Update) March 5, 2026, 2:55 PM GMT: Article adds Aramco context in second paragraph, UAE exports in 10th.

Saudi Arabia is diverting millions of barrels of oil to its Red Sea ports, helping the world’s top crude exporter maintain supply to buyers globally as the Iran war fills up storage sites across the Middle East.

Five supertankers already loaded at the western port of Yanbu this month, where exports have risen to three times the average of February, tanker-tracking data compiled by Bloomberg show. Saudi Arabia normally ships the vast majority of its oil from Ras Tanura on the Persian Gulf and, while those loadings have not halted, the war means cargoes are not leaving the region as normal.

The conflict is choking off a swath of oil, fuel and gas supply. While Saudi Arabia can divert the bulk of its crude, other producer countries in the region face a shrinking window to resume exports through Hormuz. If the waterway doesn’t get unblocked, allowing more empty tankers into the Persian Gulf, they’ll run out of storage for crude and refined products, and be forced to cut oil production. Iraq, the region’s second-biggest producer, has already done so.

Aramco said on Wednesday it was sending export volumes from its main producing regions in the east via pipeline to ports on the Red Sea. In theory, the conduit has the capacity to pump most of Saudi Arabia’s roughly 7 million barrels of daily crude exports.

But even Saudi Arabia’s Red Sea option isn’t risk free, especially for voyages to Asia. Vessels sailing to and from Yanbu will still have to traverse the Bab El-Mandeb Strait, where Iran-backed Houthi militants in Yemen only recently paused missile, drone and small arms attacks that have plagued shipping for the past two years.

Five very-large crude carriers, or VLCCs, departed Yanbu on the Saudi Red Sea coast in the first four days of March, the tanker-tracking data compiled by Bloomberg show. The vessels can load about 10 million barrels between them.

That brings average shipments so far this month to about 2.5 million barrels a day, up from 786,000 barrels a day last month, according to the tracking. Several other tankers are now headed toward the Red Sea, having previously been bound for the Persian Gulf.

The United Arab Emirates also has a Hormuz bypass. It exports more than 1 million barrels a day of crude from the port of Fujairah, located outside the strait, and Abu Dhabi could marginally increase that flow. The pipeline in question has about 1.5 million barrels a day of capacity — still a long way short of the UAE’s overall export program.

Still, with Hormuz effectively blocked, storage tanks are filling up at refineries and oil fields across the Persian Gulf and the supply of vessels to load cargoes is diminishing fast. That’s added stress on markets already rushing to secure alternative supply.

Brent futures are up almost 16% since Friday’s close and this week breached $80 a barrel for the first time in over a year. European gas soared by even more this week after major exporter Qatar cut output.

While attacks were what forced the Ras Tanura oil refinery in Saudi Arabia to halt operations, and Qatar’s main LNG facility to declare force majeure, it is a shortage of tankers that’s forced Iraq to shut in production at its biggest fields. Other producers like Kuwait could face a similar reckoning in less than two weeks, warn analysts at JPMorgan.

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