Saudi Arabia Offers Red Sea Route for Oil Exports

Saudi Arabia is offering oil buyers the option to receive their supplies via the Yanbu port in the Red Sea, amid uncertainties surrounding the Strait of Hormuz.

This comes as concerns rise about potential disruptions in the Strait of Hormuz. Saudi Aramco, the world's largest oil exporter, is providing this alternative to its long-term customers for April supplies.

Buyers choosing Yanbu will receive a portion of their monthly entitlement due to pipeline capacity constraints. The other option is to receive oil from the Persian Gulf, with the risk of no delivery if the Strait remains closed.

Aramco shipped 7.2 million barrels of crude daily last month. Saudi Arabia has a pipeline capacity of 5 million barrels per day to the Red Sea, but Yanbu's export capacity may be lower.

The Saudis typically allocate all their oil through long-term contracts, mainly to Asia. China's Sinopec is reducing refinery operations, while Japan is releasing crude oil from its reserves.