Bab el-Mandeb: tanker attacks challenge alternative oil routes

Attacks on Saudi tankers in the Red Sea last week have introduced fresh uncertainty to a critical alternative oil export route, exacerbating pressures on global energy flows. Following strikes on Saudi-flagged tankers Encelia and Layla, several vessels altered course or made U-turns just before reaching the Bab el-Mandeb chokepoint.

With the Strait of Hormuz already facing constraints, Saudi Arabia’s increased reliance on Red Sea exports via Yanbu is now being tested. Oil prices climbed sharply in July, with Brent briefly surpassing $100 per barrel on 23 July before falling back. This situation highlights the implications for crude availability, supply tightening, diesel supplies, shipping costs, and Asian markets.

Importance of Bab el-Mandeb for oil flows

Bab el-Mandeb is a narrow waterway, with its narrowest point measuring approximately 14 miles, linking the Red Sea to the Gulf of Aden. In June-July 2026, oil flows through the strait reached 7.4 million barrels per day (mbpd), according to Kpler data.

The strait serves as a vital bypass, supporting Saudi exports loaded at Yanbu and destined for key markets, particularly in Asia. It also carries a significant share of global petroleum trade alongside broader commercial shipping.

Impact on Saudi Arabia and Red Sea operations

Saudi Arabia has shifted substantial volumes, around 4-5 mbpd, via the East-West pipeline to its Red Sea terminals. Since the closure of the Strait of Hormuz, Yanbu has handled more than 70% of the kingdom’s crude and condensate exports. But last week's attacks have affected this route. Saudi crude loadings through its western terminals of Yanbu and Jizan dropped around 36% over the last two weeks, falling to 6.1 million bpd from a peak of 9.5 million bpd. Multiple tankers turned back or rerouted in response to the threats.

Direct incidents involving Saudi-linked tankers have prompted safety concerns and operational pauses. As Saudi Arabia’s main alternative to the Strait of Hormuz, Bab el-Mandeb now faces direct challenges. No new tanker attacks have been reported in the Bab el-Mandeb area since last week's attacks, suggesting that maritime traffic is continuing albeit with heightened security concerns. Saudi Arabia continues to ship oil, with millions of barrels of Saudi Arabian crude still moving from its Red Sea coast despite Houthi efforts to impose a blockade.

Ying Cong Loh, Market Analyst - Crude Oil at Kpler, said, “The drop is real and immediate, but it isn't a shutdown: Saudi-loaded cargoes are still transiting the strait, just at roughly half the throughput seen before the strikes.”

The kingdom is now rerouting shipments via the Suez-Mediterranean pipeline across Egypt. This, however, is an expensive workaround and adds considerable voyage time, particularly for oil shipments bound for Asia. Saudi oil exports from Yanbu to South Korea take roughly 24 days via Bab el-Mandeb, compared to 54 days via Suez and the Cape of Good Hope, according to Kpler data.

Effects on global oil markets

As Brent crude briefly jumped more than $100 per barrel this month, analysts continue to highlight risks if the attacks continue, leading to physical supply losses or a shortage of tanker availability. Sustained disruptions to Bab el-Mandeb would have implications beyond Saudi Arabia’s crude exports. Longer voyages around the Cape of Good Hope would tie up tankers for additional weeks, reducing fleet availability and increasing global freight rates. 

Regionally, Asia remains the main destination for Saudi crude exported via the Red Sea. Countries such as South Korea, China, and India would be particularly affected by prolonged delays. India could also face a dual impact through higher costs for imported crude. Meanwhile, Asian refiners that have increasingly relied on Saudi crude shipped from Yanbu may be affected, while Europe could face tighter diesel supplies as Middle Eastern cargoes take a longer route.