State oil producer Saudi Aramco has informed its Asian term customers that April allocations will be limited to its flagship Arab Light grade, loaded from the Yanbu export terminal on the Red Sea. This shift reflects efforts to bypass the Hormuz chokepoint, where transit has been heavily constrained.
Export data shows that Saudi Arabia shipped around 4.355 million barrels per day (bpd) in March, significantly lower than the 7.1 million bpd recorded in February. The decline highlights the scale of disruption caused by restricted access through the Gulf.
To maintain flows, Saudi Arabia is redirecting as many cargoes as possible through the Yanbu port, which remains the only viable route for Arab Light exports without passing through the Strait of Hormuz. Shipments via Yanbu are expected to rise to a record 3.8 million bpd this month.
However, even increased volumes from the Red Sea are unlikely to fully compensate for the lost capacity through Hormuz. Additional risks remain around the Bab el-Mandeb Strait, another critical shipping route that has previously faced security threats.
Amid these constraints, Saudi Arabia is estimated to have reduced crude production by more than 2.5 million bpd, reflecting the impact of limited export capacity.
The reduced supply to Asia is expected to tighten regional markets further, forcing refiners to seek alternative sources of crude amid ongoing geopolitical uncertainty.
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