Saudi Arabia reroutes oil via Suez Canal to Taiwan, doubling costs and adding a month to transit time: Reuters

Saudi Arabia is increasingly relying on the Suez Canal for its crude oil exports as Houthi attacks disrupt shipping in the Red Sea and the Strait of Hormuz, leading to substantial increases in shipping costs and transit times.

While Saudi Arabia has used the Suez Canal for some exports previously, it has not been a primary route for decades. This is largely because its main buyers are now in Asia, making the traditional route through the Strait of Hormuz more efficient. However, escalating Middle East tensions have forced tankers carrying Saudi crude to take a circuitous route around Africa to reach Asia, adding about a month to the journey.

Shipping data reveals that the voyage from Saudi Arabia's Red Sea port of Yanbu to Taiwan, which typically takes 19 days, now requires 48 days via the Suez Canal, the Mediterranean Sea, the Strait of Gibraltar, and around the Cape of Good Hope. This extended route significantly inflates fuel costs, estimated to have doubled from $1.26 million to $2.87 million. Additionally, passing through the Suez Canal incurs a transit fee of approximately $1 million.

This rerouting follows a pattern seen in February when Saudi Arabia shifted most of its Persian Gulf exports to the Red Sea due to disruptions in the Strait of Hormuz. The recent Houthi attacks on Red Sea vessels have rendered this area unsafe, compelling the kingdom to utilize the Suez Canal route. Large oil tankers may need to transit the Suez Canal partially empty and refuel in the Mediterranean, or Saudi Arabia might use the SUMED pipeline, which bypasses the canal and can transport up to 2.5 million barrels of crude daily.