Hormuz is at a standstill, and tankers are rerouting to the Red Sea, with 30 ships already diverted!

The Middle East conflict is reshaping the global crude oil transportation landscape. After the near paralysis of the Strait of Hormuz, approximately 30 supertankers are collectively rerouting toward Saudi ports in the Red Sea, a figure far exceeding historical averages, reflecting deep disruptions in Middle Eastern energy exports.

According to shipbroker sources, about 30 Very Large Crude Carriers (VLCCs) are expected to head to Yanbu in western Saudi Arabia over the next few days, whereas the port’s historical average monthly arrivals are only around two ships. Meanwhile, Saudi Aramco announced plans this week to export about five million barrels of crude oil daily via the Red Sea to compensate for the disruption in the Hormuz route.

This large-scale rerouting is directly caused by the near shutdown of the Strait of Hormuz. Iran’s attacks on passing ships and infrastructure have halted nearly all oil exports from the Gulf via Hormuz. Oil-producing countries like Iraq, Kuwait, and the UAE have reduced output as their Gulf storage facilities become saturated. For investors, the global oil supply chain is undergoing a forced reorganization, with the risk premiums and capacity of new routes becoming key market variables in the near term.

Rerouting Wave: 30 VLCCs Simultaneously Head to Yanbu

Based on AIS signals tracked by shipbrokers and charter agreements signed this month, about 30 VLCCs are heading to Yanbu, a rare surge compared to the long-term average of about two ships per month.

Matthew Wright, chief freight analyst at the data platform Kpler, said, “Yanbu’s popularity has surged sharply, and this situation is unlikely to change in the short term.” He added that since the Houthi attacks paused last year, ships have been “gradually” resuming Red Sea navigation, but the recent dense attacks near Hormuz provide “solid evidence… Iran has the capability and is actively targeting ships.”

John Ollett, freight analyst at price reporting agency Argus, stated, “Given the disruption in the Strait of Hormuz, there is no alternative. The Houthis haven’t launched attacks for months, and Yanbu remains the only option for crude exports.”

Saudi Arabia can implement this plan thanks to a critical piece of infrastructure—a pipeline connecting its eastern oil-producing region with the western port of Yanbu. The country typically exports about 7 million barrels daily, mostly via the east coast into the Persian Gulf, and this pipeline provides an outlet amid current difficulties.

Major Shipowners and Cargo Flows

Participating shipowners include several international shipping giants.

According to shipbroker sources, Dynacom Tankers, owned by Greek billionaire George Prokopiou, and Minerva Marine, owned by Andreas Martinos, have both dispatched ships, with vessels passing through Hormuz this month. Norwegian shipping magnate John Fredriksen’s Frontline and China’s state-owned COSCO are also among the rerouting fleet. Dynacom, Minerva, Frontline, and Cosco did not immediately respond to requests for comment.

Brokers indicate that most of these shipments are “contract cargo”—long-term agreements to ship Saudi crude to Asia. Parties involved have renegotiated contracts to change the loading port from Persian Gulf terminals to Yanbu. The main destinations are China, with some cargoes heading to India and South Korea.

Dual Risks of the New Route

Rerouting through the Red Sea comes with costs. Oil tankers entering the Red Sea from the south must pass through the Bab al-Mandab Strait, where Houthis have attacked vessels multiple times in recent years, and the area is within range of some Iranian missiles.

Martin Kelly, head of consulting at EOS Risk, an maritime intelligence agency, said, “Vessels passing through the Bab al-Mandab Strait still face significant risks.” He pointed out that a more direct threat comes from Iran’s strike capabilities—its missiles can cover the Red Sea and beyond.

In theory, oil tankers loaded in western Saudi Arabia could transit the Suez Canal northward to Asia, but this would significantly increase transit time and costs.

Matthew Wright noted, “Risks to Middle Eastern energy assets are all possible. But you have to keep operating—every port capable of receiving cargo is being maximized.” Houthis began attacking Red Sea shipping after the Gaza conflict erupted in October 2023, and although they signaled a halt after a ceasefire in Gaza last November, the risks have not fully dissipated.

Risk Warnings and Disclaimers

Market risks exist; investments should be made cautiously. This article does not constitute personal investment advice and does not consider individual users’ specific investment goals, financial situations, or needs. Users should evaluate whether any opinions, views, or conclusions herein are suitable for their particular circumstances. Responsibility for investment decisions rests with the individual.