Houthi Embargo Forces Saudi Arabia's Red Sea Crude onto Suez Canal Route
Tanker traffic through Bab el-Mandeb has collapsed, pushing Saudi exports from Yanbu to reroute north through the Suez Canal as infrastructure runs at capacity.
Red Sea crude tanker traffic fell to a multi-month low on Tuesday (2026-07-28), with more than half a dozen empty supertankers sailing toward Egypt's Sidi Kerir terminal rather than loading at Yanbu, as Saudi Arabia re-routed its exports for the second time since the conflict began, tanker tracking data showed.8
Yanbu is the endpoint of Saudi Arabia's East-West Pipeline, the kingdom's traditional contingency for any threat at the Strait of Hormuz. If Persian Gulf volumes were blocked, Riyadh pumped west to the Red Sea. Houthi rebels in Yemen have now made that exit contested too. They announced an embargo on Saudi crude exports through the Bab el-Mandeb Strait on Wednesday (2026-07-22), and ships began turning away from the strait's southern end almost immediately, Rigzone reported. A MarineTraffic analyst said that same day the "Bab el-Mandeb risk picture is deteriorating."5,6,7
The timing was particularly damaging for Riyadh. In the week ending July 17 (2026-07-17), Saudi Arabia had been shipping 5.9 million barrels a day from its two Yanbu terminals, a record pace set precisely because Hormuz disruptions had pushed the kingdom to maximise Red Sea throughput, according to tanker tracking data cited by Rigzone. One vessel caught mid-voyage, the Greek-owned Suezmax Amazon, diverted on Tuesday (2026-07-21) after departing Yanbu with more than 1 million barrels aboard, switching to the Suez Canal route instead.5
The revised plan sends crude northward through the Suez to Sidi Kerir on Egypt's Mediterranean coast. Saudi Aramco has indicated it intends to sustain more than 5 million barrels per day through alternative routing, OilPrice.com reported Tuesday (2026-07-28). Industry estimates put existing alternate-route infrastructure capacity at roughly that same ceiling, leaving negligible buffer for further disruptions or unexpected demand spikes.1,8
The Suez Canal was already handling elevated volumes before the Houthi announcement. Egyptian statistics agency CAPMAS data show 529 oil tankers transited in April 2026, 28% more than a year earlier, driven partly by the Hormuz closure pushing ships north. Canal revenue reached $419 million that month, the highest figure since early 2024. Authorities estimate cumulative losses from earlier disruptions at $9 billion or more.2
Whether the canal can absorb a full Saudi VLCC redirect without congestion remains unanswered. The April surge involved tankers rerouted from multiple origins; redirecting Saudi Arabia's peak-rate Yanbu programme concentrates flows onto a single Egyptian port in a way that is qualitatively different from general traffic growth.2
The broader supply picture remains stretched. Industry estimates cited by India Seatrade News put each week of Hormuz disruption at roughly 100 million barrels removed from global supply. Saudi Aramco chief Amin Nasser has said the market has absorbed an estimated shortfall of close to 1 billion barrels since the conflict began in late February (2026).1
ICE Brent crude front-month traded at $87.07 a barrel in early European trading on Wednesday (2026-07-29), well off the $95 level briefly reached when the Bab el-Mandeb embargo was announced on July 22 (2026-07-22) and Washington downplayed progress on Iran diplomacy, NBC News reported. OilPrice.com noted on Tuesday (2026-07-28) that Iran had suspended retaliatory attacks, a shift that appears to be pulling prices back even as the physical routing constraint on Saudi crude has not eased.8,6
Houthi control over Bab el-Mandeb operates independently of Iranian battlefield posture, and the two pressures are tracking on separate trajectories. U.S. Central Command reimposed a full blockade on Iranian shipping and ports on Tuesday (2026-07-14), signalling Washington's assessment that the ceasefire with Tehran was effectively over. That decision is separate from whatever tactical restraint Iran is currently signalling.4
Alternative pipeline routes that would reduce dependence on either Hormuz or the Red Sea remain in the planning stage. A May 2026 analysis by the Straits Times noted Gulf states were weighing new infrastructure corridors, but none are operational. Saudi Arabia's western export contingency runs through Sidi Kerir for now. Any move by the Houthis to extend interdiction further north along the Red Sea, past the strait itself, would remove that option too.3