Sidi Pipeline Damage Puts Saudi Red Sea Oil Route at Risk
Damage to the Sidi pipeline threatens the Saudi export bypass that has been keeping global supply moving around the Hormuz blockade.
Damage to the Sidi pipeline has put a segment of Saudi Arabia's Red Sea export bypass at risk, Bloomberg reported on Thursday (2026-06-25), adding fresh strain to the infrastructure Riyadh has been depending on since Iranian forces blocked the Strait of Hormuz in late February. Saudi Arabia has been significantly increasing crude oil exports through its Red Sea terminals in response to the Hormuz closure, according to India Seatrade News.3
Saudi Aramco has been routing more than 5 million barrels per day through those Red Sea terminals since the blockade began, India Seatrade News reported.3 That volume represents the kingdom's primary workaround in a conflict that, by Aramco's own count, has already cut roughly 1 billion barrels from global supply.3 The Saudi chief executive warned earlier that even at full bypass capacity the kingdom could serve only about 70% of its usual customers, and that the Hormuz stranglehold carried "catastrophic" market implications.4
ICE Brent crude front-month was trading at $75.34 on Thursday (2026-06-25), up 0.6% on the session. The level reflects how far the war premium has already unwound: ICE Brent crude front-month was around $85 in mid-May (2026-05-19), itself down 14% from pre-war levels, according to The Guardian.4 That trajectory rests partly on the assumption that bypass infrastructure has been holding. Sidi pipeline damage tests that assumption directly.
The Saudi pipeline network has performed above expectations since the conflict began. Aramco ramped its overland capacity to 7 million barrels per day within eight days of the Hormuz closure, keeping roughly 60% of pre-war export volumes moving via alternative routes, according to Zawya.2 Routing through Red Sea terminals added to that, but Red Sea infrastructure was already under pressure from a blockade now approaching the 11-week mark, according to The Guardian.1
Industry estimates put the cost of continued disruption at nearly 100 million barrels of lost supply for every week Hormuz remains closed.3 The EIA assessed average Hormuz throughput at 21 million barrels per day in 2022, making it the world's most important oil chokepoint by volume.5 Partial damage to the Red Sea bypass system compounds the difficulty of managing that shortfall.
The UAE has been building parallel bypass capacity. The Abu Dhabi Crude Oil Pipeline (the Habshan-Fujairah line) carries up to 1.8 million barrels per day, and Abu Dhabi National Oil Company has brought its 5 million barrel per day capacity target forward by three years, aiming to reach it by next year.2 A second pipeline is due to complete around the same timeframe, according to The Guardian.1 The UAE energy minister has said the country could push to 6 million barrels per day if necessary, though ADNOC reported only 4.85 million barrels per day of throughput in May 2024 and has not provided an update since.2
The gap between ADNOC's stated ceiling and its last known throughput leaves limited spare capacity to absorb a disruption to Saudi Red Sea flows. UAE expansion plans target 2027; the bypass arithmetic for the remainder of 2026 relies on infrastructure operating under sustained stress, with Aramco keeping roughly 60% of pre-war exports moving as of late May (2026-05-21).2
At $75.34, ICE Brent crude front-month is pricing a supply crisis that is severe but contained. The Sidi pipeline development arrives when that containment narrative had been gaining credibility in the market. How quickly Aramco can isolate and repair the affected segment, and whether Red Sea terminal throughput remains fully intact, will determine whether the discount holds or whether traders revisit the supply assumptions that have been pressing ICE Brent crude front-month lower since mid-May (2026-05-19).4,3