"Bypassing" the Strait of Hormuz, Saudi oil exports "recover over half," but can this "Plan B" hold up?

After the Strait of Hormuz nearly closed, Saudi Arabia used a pipeline that crosses the desert interior with a 45-year history to restore oil exports to over 60% of pre-war levels, providing a critical buffer channel for what the International Energy Agency (IEA) calls “the largest supply disruption in oil market history.” However, this bypass route is not a safe passage; it merely shifts the risk from one choke point to another.

According to ship tracking data compiled by Bloomberg, over the past five days, oil exports from Saudi Arabia’s Yanbu port in the Red Sea have reached approximately 4.19 million barrels per day, about 60% of Saudi pre-war daily exports of around 7 million barrels, a significant increase from the pre-conflict level of about 1.4 million barrels per day at Yanbu, with peak daily volumes reaching 4.65 million barrels three times. Reuters, citing LSEG shipping data, reports that March Yanbu loading is expected to reach a record 3.8 million barrels per day, with at least 32 supertankers and Suezmax vessels queued offshore waiting to load, and more vessels en route.

Saudi Arabia is the only Gulf oil producer with a substantial alternative export route. Its east-west pipeline (East-West Pipeline) has a maximum capacity of 7 million barrels per day, allowing it to maintain exports relatively independently even as neighbors like Iraq and Kuwait sharply cut production. Saudi Aramco CEO Amin Nasser confirmed in early March that the pipeline would reach full capacity within days.

The core risk of this “Plan B” is that it shifts Saudi oil export exposure from the Strait of Hormuz to the Bab al-Mandab Strait— a narrow waterway at the southern end of the Red Sea, largely controlled by Houthi forces on the Yemen side. Analysts warn that if the Houthis intervene in the current conflict and disrupt Yanbu port or the Bab al-Mandab Strait, global energy markets could come under renewed pressure.

Pipeline acceleration: chemical aids for an “extreme sprint”

The alternative route Saudi Arabia is leveraging is a pipeline built in 1981, originally designed as a response to the Gulf “tankers war” during the Iran-Iraq conflict—aimed at providing a backup route if the Strait of Hormuz became uncontrollable. This approximately 1,200 km pipeline traverses the desert interior, ending at the Red Sea port of Yanbu, with a total capacity of 7 million barrels per day, of which about 5 million barrels per day are available for export, and the rest supplied to domestic refineries.

To push beyond physical limits, Aramco has taken additional measures. According to two industry sources cited by Reuters, Aramco is injecting a chemical called “drag-reducing agent” (DRA) into the pipeline— a technology that reduces internal friction, increasing flow by over 30%, previously widely used by European operators responding to Russian oil sanctions. The sources say Saudi Arabia currently has ample supplies of this chemical.

Exports surge: Saudi Arabia’s exclusive “backup channel”

Latest data shows initial signs of success for this bypass route. Bloomberg ship tracking indicates Yanbu port exports have steadily increased since the conflict erupted, with March daily levels significantly higher than January’s 1.3 million barrels and February’s 1.4 million barrels; about 70 tankers are expected to complete loading at Yanbu this month, with roughly 40 still en route.

In contrast, other Gulf oil producers are in a more passive position. The UAE has a pipeline to the Gulf of Oman, but its Fujairah terminal has been repeatedly shut down due to drone attacks, affecting route stability. Iraq and Kuwait have few alternatives and have already been forced to cut production. The IEA characterizes this conflict as the largest supply disruption in oil market history, with Saudi Arabia’s pipeline now the most critical single infrastructure supporting the global energy market.

New choke point: the geopolitical risk of the Bab al-Mandab Strait

While the east-west pipeline successfully bypasses Hormuz, it introduces the export route into another geopolitically sensitive area.

About 90% of the oil loaded at Yanbu is carried by Very Large Crude Carriers (VLCCs). In full load, these ships are too deep to pass through the Suez Canal and must traverse the Bab al-Mandab Strait to reach Asian and other major markets. Analysts estimate that about 70-75% of Yanbu’s exports are potentially exposed to risks in the Bab al-Mandab Strait. According to the U.S. Energy Information Administration (EIA), roughly 6% of global seaborne oil flows through this waterway.

Gregory Brew, senior analyst at Eurasia Group and a scholar of Iranian oil history, states: “The threat from the Houthis is real. If they attack Yanbu and cause significant damage, you could see a daily interruption of 7 million barrels of exports,” he said.

Some exports can be rerouted via another route—north from Yanbu to Egypt’s Ain Sukhna port, then through the Suez-Mediterranean (Sumed) pipeline to the Mediterranean. Analysts estimate this channel can carry about 2 to 2.5 million barrels per day, but this capacity is far below Yanbu’s total exports. According to the latest data from the Western Naval Information Center (JMIC), shipping traffic through the Red Sea and Bab al-Mandab has returned to normal levels, with about 40 ships passing in the past 24 hours, and no new security incidents reported.

Houthi forces: strategic restraint or waiting to intervene

The Houthis have not officially declared involvement in the current conflict, but their leader Abdul Malik al-Houthi stated clearly in a televised speech on March 5: “Regarding military escalation and actions, our finger is always on the trigger, ready to act when the situation demands.”

Analysts have differing views on why the Houthis have yet to act. Ahmed Nagi, senior analyst at the International Crisis Group and Yemen expert, considers this a strategic restraint rather than a lack of capacity. “Iran seems to be managing the situation gradually,” Nagi said. “They are using the Houthis as a reserve force,” he added. “In this sense, the Houthis are a card that can be played later, especially considering their ability to disrupt Red Sea shipping and create broader economic and security pressures.” He further noted, “Their current restraint appears to be a matter of timing, not unwillingness to fight.”

Gregory Brew offers another perspective based on the Houthis’ own situation: after sustained attacks from the U.S. and Israel, their military strength has been significantly depleted, and their finances are under pressure. “I believe their current fiscal and military conditions will restrain them from launching large-scale hostile actions,” he said.

Both views point to a key reality: for the global energy market, the stability of the Bab al-Mandab Strait is increasingly a critical variable for whether Saudi Arabia’s “Plan B” can continue to operate—something Riyadh cannot control alone.

Risk warning and disclaimer

Market risks are present; investments should be cautious. This article does not constitute personal investment advice and does not consider individual users’ specific investment goals, financial situations, or needs. Users should consider whether any opinions, views, or conclusions herein are suitable for their particular circumstances. Invest at your own risk.