Despite ongoing disruptions from the Iran conflict, Saudi Arabia has restored crude oil exports to more than half of normal levels, signaling initial success for its contingency plan to bypass the Strait of Hormuz. By rerouting shipments through the East-West Pipeline to the Red Sea port of Yanbu, the kingdom is setting a new record for exports from the terminal, with a growing fleet of tankers gathering off the Red Sea coast awaiting loading.
The 1,200-kilometer (746-mile) East-West Pipeline—linking eastern oil fields to Yanbu and the nearby Muajiz terminal—is now operating at full capacity. With transit through the Strait of Hormuz nearly paralyzed and volumes plunging by over 90%, Saudi Arabia has dramatically shifted its export flows westward.
According to Bloomberg-tracked data, average crude shipments from Yanbu over the past five days have reached approximately 4.19 million barrels per day (bpd), representing a significant share of Saudi Arabia’s pre-conflict total exports of around 7 million bpd and nearly tripling from the previous baseline of roughly 1.4 million bpd through the port.
Amin Nasser, President and CEO of Saudi Aramco, stated on March 10 that the pipeline’s maximum sustained capacity is 12 million bpd. Current throughput is approaching 7 million bpd, with 2 million bpd feeding the Yanbu refinery and the remaining 5 million bpd exported via the port.
As Saudi Arabia accelerates its export rerouting, tankers are converging on its Red Sea coastline. Vessel tracking data shows that as of March 17, at least 32 very large crude carriers (VLCCs) and Suezmax tankers were waiting near Yanbu to load cargo, up from 27 on March 14 and just 11 on March 11, with more en route.
Freight rates have surged accordingly: daily charter rates for VLCCs departing Yanbu now stand at around $450,000—more than ten times the 2023–2025 average of approximately $42,000.
The International Energy Agency (IEA) warns, however, that this crisis represents the largest supply disruption in oil market history—and it is far from over. Its latest monthly report indicates global oil supply has dropped by 8 million bpd this month, with Hormuz transit down over 90%. Actual shipping halts have forced Persian Gulf producers to collectively cut output by roughly 10 million bpd. The IEA has revised its 2026 global oil demand growth forecast downward by about 25%, from 850,000 bpd to 640,000 bpd.
More critically, current alternative export capacity stands at only 3.7–5.7 million bpd—far short of the typical 15 million bpd that normally flows through the Strait of Hormuz. As a result, Saudi Arabia still has approximately 14 million bpd of crude effectively stranded in the Persian Gulf.
Asian buyers, who account for the bulk of Saudi crude purchases, face a “distant water can’t quench immediate thirst” dilemma. Notably, nearly all oil shipped from Yanbu is heading north through the Suez Canal rather than south toward the Indian Ocean—a shift driven by renewed threats from Yemen’s Houthi militants to resume attacks in the southern Red Sea. This routing severely limits the ability of Saudi Arabia’s detour strategy to alleviate energy shortages in Asia.
Although IEA member countries have agreed to release a record 400 million barrels from strategic petroleum reserves, analysts caution that the move carries more symbolic than practical impact. Ultimately, oil prices will be determined by the resumption of safe passage through the Strait of Hormuz and the trajectory of the broader Middle East conflict.
