7 million barrels a day! Successfully bypassing the Strait of Hormuz, Saudi Arabia's "oil lifeline" is operating at full capacity

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According to people familiar with the matter, as of March 30, Saudi Arabia’s crucial east-west crude oil pipeline that bypasses the Strait of Hormuz is currently transporting oil at full capacity of 7 million barrels per day.

This milestone clearly shows that Saudi Arabia’s contingency plan to bypass the Strait of Hormuz is working well: the plan is designed to keep oil exports running even if its main export route is shut down. A large number of tankers have been rerouted to Yanbu Port in the Red Sea to load crude oil, providing a critical “lifeline” for global supply.

As people familiar with Saudi Arabia’s oil industry have disclosed, the crude oil exported via Yanbu Port has now reached about 5 million barrels per day, and Saudi Arabia is also exporting between 700,000 and 900,000 barrels per day of refined petroleum products. Of the 7 million barrels of crude oil transported daily through this pipeline (the Saudi east-west crude oil pipeline), about 2 million barrels flow to the country’s domestic refineries.

Previously, Saudi Aramco’s CEO Amin Nasser said during an earnings call in early March that, with customers rearranging their shipping routes, the east-west crude oil pipeline is expected to reach its full throughput capacity of 7 million barrels per day in the coming days.

From Saudi Arabia’s perspective, exporting crude oil via Yanbu Port has substantially eased the country’s supply shortfall. The export volume of 5 million barrels per day accounts for a significant portion of Saudi Arabia’s pre-war total exports (about 7 million barrels).

Meanwhile, for the entire Gulf region, the Yanbu route can only partially offset the supply shortfall caused by the closure of the Strait of Hormuz. Before the outbreak of the war, about 15 million barrels of crude oil per day were transported through this strait. Even so, the existence of this “bypass route” is one of the reasons why oil prices have not surged to the levels seen during past supply disruptions.

However, as the Yemeni Houthi forces announced their involvement in the war, the market has become concerned that the Red Sea could become a new front line of conflict. Although the Houthis have not explicitly said they will attack tankers passing through the Red Sea and the Strait of Mandeb, in the past they have used drones and missiles to threaten shipping in the area.

Saudi Arabia has long been known for stability and reliability. The country has been preparing for this worst-case scenario of a closure of the Strait of Hormuz for decades. Within hours after the first round of strikes by the U.S. and Israel against Iran, Saudi Arabia quickly launched its contingency plan and continued to increase the transportation capacity of the east-west crude oil pipeline.

The Saudi east-west crude oil pipeline cuts across the Arabian Peninsula, spanning more than 1,000 kilometers. It runs from the country’s large eastern oil fields directly to the western industrial port city of Yanbu. The pipeline’s construction dates back to the Iran-Iraq War in the 1980s, when ships were attacked in the Strait of Hormuz, though it was far less severe than the “near-closure” level caused by the current conflict.

Because transportation through the Strait of Hormuz has been disrupted—about one-fifth of the world’s oil and liquefied natural gas are supplied through this waterway—crude oil prices have surged to above $100 per barrel.

However, in recent days, the transit volume through the Strait of Hormuz has gradually recovered from the early stages of the war. The latest reports say that a small amount of Saudi crude oil is passing through the Strait of Hormuz along Iran’s coastline, with its destination being Pakistan. Data compiled by media tracking show that last Saturday, a total of seven vessels left the Persian Gulf, including 1 crude oil tanker, 2 liquefied petroleum gas carriers, and 4 bulk cargo ships.

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Responsible editor: Li Tiemin