MWE Correspondent
Saudi Arabia’s crude oil exports fell to their lowest level in at least nine years in August, as disruptions to shipping routes through the Strait of Hormuz and the Red Sea placed growing pressure on the kingdom’s oil trade.
Tanker-tracking data compiled by Bloomberg, Kpler and Vortexa showed Saudi crude exports averaging about 3 million barrels per day (bpd) in August, the lowest monthly level recorded since early 2017. The figure was less than half the roughly 7.3 million bpd shipped in February.
The decline comes amid the continuing U.S.-Iran conflict and heightened security risks around the Strait of Hormuz, one of the world’s most important energy shipping routes. Shipping activity through the waterway remained sharply below normal on Thursday, with only four commodity vessels observed crossing, compared with a 10-day average of 15.
Saudi Arabia had attempted to reduce its dependence on the Strait of Hormuz by moving more crude through its East-West pipeline to the Red Sea port of Yanbu. However, shipments from Yanbu also fell significantly, dropping from about 4.3 million bpd in June to 3.7 million bpd in July and approximately 2.25 million bpd in August.
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The situation has been further complicated by attacks and threats against commercial vessels operating near Saudi Arabia and Yemen. Two tankers carrying Saudi crude were reportedly struck by projectiles near the Strait of Hormuz earlier this week, while maritime security concerns have also affected shipping through the Red Sea.
The disruption has raised concerns among oil buyers and shipping companies, with some reportedly reluctant to load Saudi crude from Red Sea terminals because of security risks. Saudi Arabia may also be forced to consider much longer shipping routes around Africa, adding thousands of kilometres to voyages and increasing transportation costs.
Despite the sharp decline in export volumes, higher global oil prices could provide some cushion to Saudi revenues. Brent crude was trading near $96 per barrel on Thursday amid renewed concerns over Middle Eastern supply disruptions.
The latest figures underline the growing economic consequences of the regional conflict for major energy exporters. For Saudi Arabia, prolonged disruption across both the Gulf and Red Sea could make it increasingly difficult to maintain the oil-export levels needed to support government revenues and its broader economic plans.
