Saudi Arabia's largest Red Sea oil port suspended loading, causing crude oil prices to surge again, with US crude rising more than 5% intraday.

Saudi Arabia's crude oil exports have been hit again.

On Tuesday, the 15th, Eastern Time, shipping and industry sources reported that Yanbu, Saudi Arabia's main oil export port in the Red Sea, had suspended crude oil loading operations. Following this news during the midday trading session in the US stock market, international oil prices rose further. US WTI crude oil futures climbed above $106.50 per barrel, with daily gains exceeding 5%; Brent crude oil rose above $109 per barrel, with daily gains exceeding 3%.

Reuters subsequently cited trade and shipping sources as saying that Saudi Arabia had suspended crude oil loading at Yanbu port and canceled some crude oil shipments destined for European customers. Market concerns about further constraints on Saudi Arabia's crude oil export capacity have clearly intensified.

Previously, the East-West Pipeline, connecting Saudi Arabia's eastern oil fields to the Red Sea port of Yanbu, was shut down after a drone attack, disrupting this vital export route that bypassed the Strait of Hormuz. Now, if loading at Yanbu port is also affected, it means that the alternative route for Saudi crude oil to be transferred from the Persian Gulf to the Red Sea and then exported via the Red Sea will be further hampered.

Shipments to Yanbu suspended, Saudi Arabia's export route bypassing Hormuz suffers another setback.

Yanbu is one of the most important oil export ports on Saudi Arabia's Red Sea coast and the western terminus of the East-West Oil Pipeline.

Previously, in response to shipping risks in the Strait of Hormuz, Saudi Arabia significantly increased the scale of crude oil shipments to Yanbu via the East-West oil pipeline. Reuters data shows that in early September, crude oil and condensate loadings at Yanbu rebounded to approximately 3.7 million barrels per day, significantly higher than the August level.

This east-west oil pipeline, which is about 1,200 kilometers long, is designed to transport up to 7 million barrels per day. A significant portion of the crude oil can be transported to Red Sea ports, thus bypassing the Strait of Hormuz.

However, the Saudi East-West oil pipeline was forced to shut down last week after a drone attack. The Associated Press reported that the pipeline is expected to remain largely out of service for a considerable period, with repairs potentially taking weeks; Reuters stated that the disruption could affect a significant portion of global oil supplies.

Against this backdrop, a further suspension of loading operations at Yanbu Port would further restrict Saudi Arabia's ability to export goods via the Red Sea.

In other words, previously it was "oil couldn't get into Yanbu," but now market concerns have evolved into "even if oil does get to Yanbu, it may be difficult to load it onto ships for export."

Saudi Arabia's crude oil supply pressures are being passed on to European customers.

Reuters reports that Saudi Aramco has notified some European customers to cancel certain crude oil shipments, prompting major buyers, including Polish refiners, to urgently seek alternative supplies. Trade sources say prices for the affected shipments have risen above $120 per barrel.

This change shows that the disruption to Saudi exports is gradually spreading from the transportation link to the actual trade flow.

Previously, Saudi Arabia could mitigate the impact of the closure of the East-West pipeline by adjusting export destinations, increasing shipping through the Strait of Hormuz, and utilizing its inventory. However, if loading at Yanbu Port remains suspended, the alternative export capacity available to Saudi Arabia will further decrease.

The Wall Street Journal previously cited analysis suggesting that the Yanbu inventory could only provide a buffer of a few days; and if the repair time for the East-West pipelines reaches several weeks, the pressure on Saudi crude oil exports will increase significantly.

Meanwhile, the Houthi military advance along Yemen's Red Sea coast has added risks to the other end of Saudi Arabia's Red Sea export route. The Houthi advance towards the Bab el-Mandeb Strait has also jeopardized this shipping route, which was originally used to bypass the Strait of Hormuz.

Oil prices surged again as both the Hormuz and Red Sea waterways came under pressure.

The market's biggest concern is that Saudi crude oil exports are being restricted by multiple key factors at the same time.

On the one hand, shipping volume in the Strait of Hormuz has dropped sharply recently, and Iran continues to emphasize its control over the strait; on the other hand, the Saudi East-West oil pipeline was closed after being attacked, and the Red Sea export route, which should have served the function of "bypassing Hormuz", has been affected by the suspension of loading at Yanbu Port and the risk of attacks by Houthi forces.

Oil prices continued to rise during the session after further news of the suspension of shipments at Yanbu. During Tuesday's midday trading session in the US, WTI crude oil surged over 5%, hitting a new intraday high since early May, while both WTI and Brent crude were poised to reach their highest closing prices in about four months.

Reuters reports that the suspension of shipments from Yanbu, the shutdown of some Libyan oil fields, and a significant decline in shipping volume in the Strait of Hormuz have collectively exacerbated market concerns about disruptions to global crude oil supplies.

With limited global crude oil inventory buffers, concerns about the actual amount of crude oil Saudi Arabia can export could intensify further if the East-West pipeline cannot be quickly restored, the suspension of Yanbu loading continues, and shipping risks in the Strait of Hormuz and the Bab el-Mandeb Strait continue to rise.

From the Hormuz to the Red Sea, Saudi Arabia's two critical lifelines for crude oil exports are simultaneously under pressure.

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