Saudi Aramco Reroutes Crude Around Africa as Houthi Attacks Escalate
In brief
- Saudi Aramco negotiates crude rerouting around Africa with Asian refiners, adding roughly a month to transit times
- Brent crude climbs above $98 per barrel, up 33% in a month, approaching the $100 psychological level
- Houthi militants escalate Red Sea attacks; three Saudi tankers reversed course in the Bab el-Mandeb Strait
- Alternative routes include Egypt's Sidi Kerir Mediterranean port and the SUMED pipeline connecting Red Sea hubs
Red Sea chokepoint tightens
The Bab el-Mandeb Strait, a narrow chokepoint connecting the Red Sea to the Gulf of Aden, has become a flashpoint for global energy markets. Houthi militants have escalated attacks on tankers in the Red Sea, with three Saudi oil tankers recently reversing course in the strait after receiving direct warnings from Houthi forces. The disruptions, which started in late 2023, have already forced significant volumes of crude that previously transited through the Suez Canal corridor to be diverted around the Cape of Good Hope over the past two and a half years.
The price of crude reflects this pressure. Brent crude has climbed above $98 per barrel, up more than 33% in just a month, and sits within striking distance of the psychologically important $100 level.
Logistics alternatives take shape
Aramco and its Asian counterparts are weighing two main alternatives. Options on the table include sourcing crude from Egypt's Sidi Kerir port on the Mediterranean coast and using pipeline infrastructure that connects Red Sea oil hubs at Ain Sokhna to Mediterranean export terminals. The SUMED pipeline, which runs from Ain Sokhna on the Red Sea to Sidi Kerir on the Mediterranean, can handle around 2.5 million barrels per day at full capacity, giving it meaningful capacity for a structural shift in routing.
Rerouting around the Cape of Good Hope adds roughly a month to the journey from the Persian Gulf to Asian refineries. That's not trivial. Longer shipping routes mean more vessel-days per cargo, which tightens the global fleet and supports freight rates, creating a ripple effect across maritime economics.
What's next
Saudi Aramco has declined to comment on the negotiations, and no final agreements have been reached as of late July 2026. The talks remain fluid. If formal agreements emerge, they'd signal a structural reconfiguration of global oil logistics—one with lasting implications for refining margins, shipping costs, and ultimately the price consumers pay at the pump.
