The conflict in the Middle East has driven crude oil exports from Saudi Arabia’s port of Yanbu to record highs and repositioned Oman as a “central pivot” for rerouted Gulf trade, research has found.
Around a dozen vessels per day are now transiting the Strait of Hormuz, with Iran selectively allowing some to pass through a corridor north of Larak Island, close to the country’s coastline, maritime intelligence agency Windward said in a report this week. The figure represents a drop of more than 90% from pre-conflict levels.
Iran is prioritising vessels carrying agricultural cargo into the country, tankers exporting Iranian oil, and those carrying LPG, it said. Permission is also based on ownership profile and geopolitical alignment.
The global trade system is responding to the disruption by “reorganising” routes, Windward said, with activity at Oman’s port of Salalah “the clearest signal of this shift”.
The number of vessels changing their reported destination to Salalah has risen sharply this month, with vessels discharging cargo in Oman that is then transported onwards by feeder vessels or on land, it said.
These channels have been supported by authorities, it added. The Dubai government issued a customs notice on March 14 establishing a “temporary makeshift” land-based corridor for shipments arriving in Oman to facilitate imports to the UAE, while Qatar has designated Omani ports as substitutes for Hamad.
For energy shipments, ship-to-ship bunkering operations off Oman have reached record levels, according to Windward, and exports are being redirected away from the traditional markets of Singapore, South Africa and South Korea and towards China, Pakistan, Taiwan and the UAE.
Salalah has been subject to attacks, including a drone strike that left services suspended on March 28, but carriers including Hapag-Lloyd and Maersk notified customers on March 31 that operations were being gradually resumed.
Meanwhile, crude oil flows through Saudi Arabia’s East-West pipeline – which runs between the Persian Gulf and the Red Sea port of Yanbu – have also risen considerably.
The pipeline is now operating at its full capacity of 7 million barrels per day, Windward said in a separate report, with Yanbu port’s loading capacity around 4.5 million barrels per day according to Kpler data. In January and February, the port exported under 800,000 barrels per day on average.
However, despite signs the region’s trade flows are reorganising, the Windward reports said the situation remains fragile.
Iranian strikes in Oman suggest the “primary workaround is now itself becoming a target”, and the Houthi forces’ entry into the conflict via strikes on Israel “points to potential escalation in the Red Sea”, the company said.
At the same time, Russia’s Black Sea port of Ust-Luga – which exports significant volumes of oil to India, China and Turkey – has sustained five drone strikes in the last week.
“The global oil market is now exposed to simultaneous pressure across Hormuz, Yanbu, and Ust-Luga,” it said. “If these three hubs were disrupted simultaneously, the resulting impact would extend beyond maritime operations into a broader global supply shock.”
Combined export losses in that scenario could top 27 million barrels per day, equivalent to the removal of US$3bn per day in value removed from export flows, Windward said.
