Saudi Arabia has found itself in the situation it spent decades trying to avoid: the kingdom has plenty of oil, but increasingly few safe ways to deliver it to customers. The war with Iran has sharply reduced traffic through the Strait of Hormuz, while renewed escalation in Yemen is simultaneously undermining security along the Red Sea route.
In August, Saudi oil exports fell to roughly 3.2 million barrels a day according to tanker-tracking data, their lowest level in at least 13 years. More recent shipment estimates put the figure closer to 3.5 million barrels a day, but the difference reflects methodology and does not alter the broader picture of a severe decline.
The drop in oil actually reaching the market appears even more significant. A newer estimate put Saudi supply in August at roughly 6 million barrels a day, the lowest level in more than three decades. Figures reported by Riyadh to OPEC are higher, reflecting a different methodology for measuring production and supply.
Daycom’s preliminary analysis of open and verified data indicates that Saudi Arabia’s central problem is no longer a conventional shortage of production capacity. The kingdom is facing a logistics squeeze: every alternative route is either longer and more expensive or increasingly exposed to military risk.
Before the current war, the Strait of Hormuz was the natural outlet for much of Saudi Arabia’s crude bound for Asian markets. A substantial share of the Persian Gulf’s energy exports passed through it. Traffic has now collapsed to a fraction of prewar levels, with only seven vessels recorded on September 10 versus roughly 125 a day before the conflict.
Riyadh’s first response was to make heavier use of the East-West pipeline, which carries crude from eastern oil fields across the kingdom to the Red Sea port of Yanbu. That system bypasses Hormuz, but it does not eliminate dependence on another narrow maritime chokepoint: the Bab al-Mandab Strait off Yemen.
That is where the second obstacle has emerged. The Houthis, who control much of northern and western Yemen, announced a campaign this summer against shipping linked to Saudi Arabia. Since then, they have claimed a series of attacks on vessels heading to or departing from Saudi ports.
On September 8, the conflict escalated sharply. The Houthis struck southern areas of Saudi Arabia, including energy infrastructure in Jizan and other locations. Saudi authorities reported 73 people injured, fires and temporary shutdowns at some energy facilities.
For shipping companies, that changed the risk calculation. The Red Sea had previously been viewed as a difficult but workable alternative to Hormuz. Now the threat extends beyond waters immediately off Yemen into areas farther north that Saudi tankers must cross after loading at Red Sea ports.
Bab al-Mandab is not physically closed. On September 10, 26 vessels passed through the strait, and ships without Saudi links continue to use the route. But for oil markets, formal access matters less than whether shipowners, insurers and crews are willing to accept the risk attached to a particular voyage.
The situation became more complicated after Houthi forces seized the strategic port of Mocha on Yemen’s western coast. That brought them closer to Bab al-Mandab and strengthened their ability to influence approaches to one of the world’s most important maritime corridors. Fighting in Yemen has become the most intense since the 2022 truce.
Riyadh is already testing an even longer workaround. Some crude can be sent north through the Red Sea toward the Suez Canal area and then moved by pipeline to the Mediterranean. This reduces tankers’ exposure to some dangerous waters but makes the overall supply chain substantially more complex.
For Asian buyers, that option is particularly inefficient. Saudi crude is effectively sent west first before having to make its way back toward Asian markets along longer sea routes. That adds days or even weeks to delivery times, increases freight costs and requires more tankers to move the same volume of oil.
As a result, the kingdom is being forced not only to reduce shipments but also to draw on inventories to sustain deliveries. Recent estimates indicate that Saudi stocks continued to fall while actual tanker loadings declined by more than one million barrels a day over the month.
The impact on global markets is already visible. Brent crude moved above $100 a barrel again this week as traders priced in disruption across several critical Middle Eastern corridors at once. Markets are reacting not only to barrels lost today, but also to the risk that shipping conditions could deteriorate further.
The crisis also puts OPEC+ in an uncomfortable position. In early September, the group chose to keep October production targets unchanged rather than announce another increase. But formal quotas increasingly tell only part of the story: producing oil and physically delivering it to customers have become separate challenges.
Saudi Arabia is effectively trapped between two strategic straits. To the east, Hormuz remains part of the U.S.-Iran war; to the west, Bab al-Mandab is under pressure from a renewed confrontation with the Houthis. The kingdom’s geographic advantage as an exporter is turning into a logistical vulnerability.
It would be too simplistic, however, to describe the Houthis merely as an instrument of Tehran. The movement has its own political and territorial objectives in Yemen and a long history of conflict with Saudi Arabia. Even so, its attacks objectively increase pressure on Iran’s adversaries and add new strain to global energy flows.
For the world economy, the danger is that disruption is no longer concentrated in a single strait. Even a partial recovery in Hormuz would not solve the problem if the Red Sea became too costly or dangerous to use. A supply chain is only as reliable as its weakest link.
Saudi Arabia’s oil crisis has therefore evolved from a regional logistics problem into one of the major risks facing global energy prices. The kingdom still has vast reserves and production capacity, but the war is exposing the limits of the very idea of a “backup route”: when conflict reaches both exits from the region, there may be no real alternative left.
