Oman and Saudi Arabia seek alternative oil routes amid maritime tensions

Geopolitical tensions in the Middle East are driving a strategic shift in energy logistics as nations seek to bypass critical maritime choke points. Oman is positioning itself as a vital alternative through the Ras Markaz oil terminal. Located on the Arabian Sea, the terminal is outside the Strait of Hormuz. The Oman Tank Terminal Company is expanding its capacity by approximately 20% with eight new storage tanks, aiming for a total capacity that could eventually scale to 200 million barrels. Oman also plans to construct a pipeline network to connect oil fields directly to Ras Markaz, bypassing the Strait of Hormuz entirely.

Simultaneously, the Bab al-Mandab Strait has emerged as a significant new pressure point for energy security. While Saudi Arabia utilizes an East-West Crude Oil Pipeline to move oil from its Eastern Province to the Red Sea, vessels must still navigate the Bab al-Mandab Strait to reach global markets. Security in this region is complicated by the capabilities of Houthi forces in Yemen to threaten commercial shipping. As a result, some vessels are opting for longer routes around the Cape of Good Hope, which can add 10 to 14 days to voyages, increasing freight costs and reducing the availability of tankers.