Six Saudi Arabia Oil Tankers Reroute Around Africa to Avoid Houthi Attacks

Crude oil prices slipped on Sunday, with the United States Oil Fund (AMEX:USO) trading at 132.16 dollars, down 1.79% on the day, even as fresh reports of six Saudi Arabia tankers rerouting away from the Red Sea underscored just how fragile Middle East shipping lanes have become. The fund still sits well within its 52 week range of 102.42 to 142.33, with an RSI near 61 suggesting the market has not tipped into overbought territory despite the headlines.

Key Takeaways

• Six empty Saudi tankers turned away from the Bab el Mandeb chokepoint and are sailing around Africa instead.
• More than half a dozen additional supertankers are heading to Egypt's Sidi Kerir port to load Saudi crude.
• The detours add roughly two weeks or more to typical delivery times for supertankers.
• USO fell 1.79% to 132.16 dollars despite the supply disruption risk.
• Houthi attacks and blockade threats in Yemen are driving the rerouting.

Why Six Saudi Arabia Tankers Are Avoiding the Red Sea

Vessel tracking data reviewed by shipping analysts shows six empty tankers that would normally load crude near the Arabian Peninsula have instead turned south in the Arabian Sea, bypassing the Bab el Mandeb strait entirely. Their signaled destinations include Gibraltar and the South African refueling ports of Durban and Algoa Bay. That is a striking shift for vessels typically bound for Middle East loading terminals, and it reflects how seriously operators are treating threats from Yemen's Houthi movement, which last week announced a blockade attempt on Saudi shipments through the southern Red Sea.

Egypt Becomes the Workaround

Saudi Arabia, still the world's largest crude oil exporter, has leaned on an alternate route through Egypt to keep barrels flowing. More than eight very large crude carriers are now signaling Egypt's Sidi Kerir port as their destination, expected to arrive over the next two to three weeks. The mechanics involve shuttling crude from Yanbu to Ain Sukhna on Egypt's Red Sea coast, then pushing it through the SUMED pipeline overland to Sidi Kerir on the Mediterranean side. It is a costlier, slower workaround, but it avoids the strait where Houthi forces struck Saudi tankers last week.

What the Rerouting Means for Oil Markets

A full trip around Africa instead of through Bab el Mandeb and the Suez Canal adds at least two weeks to a supertanker's voyage, tying up vessels and raising effective shipping costs even when the cargo itself is untouched. At least one tanker carrying Saudi crude bound for Asia has already taken the long route around Africa rather than risk the strait. These delays ripple into freight rates and delivery schedules, though they have not yet been enough to push oil prices higher, given USO's decline on the day.

Dollar and Inventory Backdrop

Oil's move also has to be read against a broader macro backdrop. A firmer dollar tends to weigh on commodities priced in it, making crude relatively more expensive for buyers holding other currencies, while inventory levels and demand expectations continue to shape day to day price swings more than any single geopolitical headline. USO's RSI reading near 61 suggests buying interest has been present but not extreme, even with the shipping disruptions in play.

How Long Will the Red Sea Detours Last?

Nobody can say with certainty when tankers will return to the direct route through Bab el Mandeb. As long as Houthi threats and attacks continue, Saudi Arabia and Western shipping operators appear ready to keep absorbing the extra time and cost of the Egypt workaround or the full African detour. Whether that eventually shows up in sustained price pressure for crude, rather than the modest pullback seen in USO this week, will depend on how the security situation in the strait evolves.

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