Hormuz is blocked; Saudi Arabia and the UAE are urgently rerouting to the Red Sea, with at least 25 oil tankers already diverted!

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The situation in the Strait of Hormuz is reshaping the global crude oil market.

On Wednesday, according to Bloomberg citing ship-tracking data, Saudi Aramco is making every effort to boost the capacity of its east-west pipeline, the UAE’s Fujairah export volume has surged sharply, and at least 25 oil tankers have rerouted to the Saudi Red Sea port of Yanbu, presenting a short-term restructuring of global oil supply patterns.

Saudi Aramco CEO Amin Nasser stated that the east-west pipeline flow to Yanbu will reach its full capacity of 7 million barrels per day “within days,” and “everything is built on the redeployment of oil tankers from east to west.” At the same time, the UAE’s Fujairah port exports this month have jumped from about 1.1 million barrels per day previously to about 1.6 million barrels per day.

On Tuesday afternoon, after news emerged that a U.S. warship was escorting tankers through the Strait of Hormuz, Brent crude futures temporarily fell back to around $81 per barrel, alleviating market fears of a total shutdown of the route; however, analysts warn that the possibility of restoring normal transit order within this week remains limited.

Saudi Arabia and the UAE Activate Alternative Export Routes on Two Fronts

As the Strait of Hormuz remains blocked, major oil-producing countries in the Gulf have quickly activated contingency export plans. Saudi Aramco is pushing the east-west pipeline’s throughput toward its design capacity of 7 million barrels per day, transferring crude from Persian Gulf facilities to the Red Sea port of Yanbu, from where oil is exported to the global market by tankers. Amin Nasser said that as tankers continue to be redeployed from the eastern route to the western one, pipeline flow will reach a peak within days.

The UAE is implementing a similar plan via the port of Fujairah. Located on the Gulf of Oman, it can export directly, bypassing Hormuz, and this month’s export volumes have grown by about 45% compared to recent averages, rising to about 1.6 million barrels per day.

At the same time, French President Macron spoke by phone with the Italian and Greek prime ministers on Thursday morning. The three leaders agreed to coordinate the delivery of military supplies to Cyprus and to safeguard freedom of navigation in the Red Sea together. Europe is seeking to stabilize this key shipping route through multilateral coordination.

Iran Escalates Warnings, Market Tensions Remain

Although alternative routes are being accelerated, uncertainties on the geopolitical front continue to weigh on the market.

Ali Larijani, secretary of Iran’s Supreme National Security Council, issued a warning saying the Strait of Hormuz will “either become a path of peace and prosperity for all, or a way of failure and suffering for warmongers,” employing tough language and implying that Iran does not rule out further escalation.

Currently, some vessels are still passing through the Strait of Hormuz with their transponders turned off, indicating that the risks to the shipping lane have not been eliminated. This conflict has reduced global oil supply by about 6%, with multiple oil-producing countries forced to cut production due to full storage tanks; the pressure on the supply side will be difficult to fully absorb in the short term.

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