Saudi Arabia faces rising oil export costs due to Red Sea tensions

Saudi Arabia is facing increasing economic and logistical challenges regarding its oil exports due to maritime operations in the Red Sea. To avoid the Bab el-Mandeb Strait, Saudi Aramco has been forced to restructure crude oil transport plans, chartering tankers from South Korean, Greek, and Norwegian companies to move oil from Yanbu Port to the Mediterranean via alternative routes such as the Suez Canal and the Cape of Good Hope.

This shift has resulted in longer transit times and higher shipping and insurance costs, impacting major importers in Asia and Japan. While usual oil flows once exceeded four million barrels per day, volumes through Egypt's Sidi Kerir port have been limited to approximately 670,000 barrels per day. Additionally, satellite imagery and international reports have indicated damage to Aramco facilities and storage tanks in Jizan following strikes on August 18, highlighting the security risks facing Saudi energy infrastructure.