Saudi Arabia is offering an alternative plan to bypass the Strait of Hormuz, but the Red Sea route faces significant capacity constraints. The Yanbu port, located on the Red Sea, can only receive a portion of the monthly oil supply due to limitations on the pipeline's capacity. The pipeline, which spans 1,200 km across the country, can only transport 5 million barrels per day, while the export capacity at the Yanbu port may be even smaller.
The Strait of Hormuz, on the other hand, is a narrow passage between the Arabian peninsula and Iran, which allows for faster and more direct shipping to Asia. The sea journey to Asia from the Red Sea is longer, adding to shipping time and cost.
Aramco, the world's biggest oil exporter, has been ramping up shipments via Yanbu since the beginning of the war, but the numbers underline the issues. In February, Aramco shipped 7.2 million barrels a day of crude, mostly from the Gulf terminals of Ras Tanura and Juaymah. The Saudis are giving long-term oil customers the option of receiving their allocations for the month of April via the Yanbu port, but buyers who choose Yanbu will only get a portion of their monthly supply.
