By Enes Tunagur and Shadia Nasralla
LONDON, July 24 (Reuters) – With two of its key oil export routes – the Hormuz and Bab el- Mandeb straits – disrupted by Iran and Iran-allied Houthi militants, Saudi Arabia has to resort to exporting oil via Egypt’s Suez Canal.
While the kingdom has previously used the Suez route to export some of its oil, it has not tested it as the main export outlet for decades.
Unlike in the 1970s and 1980s, when Saudi Arabia’s top oil buyers sat in Europe and the United States, the majority of its buyers today are in Asia.
To get to Asia, tankers with Saudi oil will have to circumnavigate the whole of Africa, adding around a month to their journey.
It takes only 19 days for a tanker to sail from Saudi Arabia’s Red Sea port of Yanbu to Taiwan via Bab el-Mandeb.
A route via Suez, the Mediterranean and Gibraltar and then around the Cape of Good Hope takes 48 days, according to Kpler and LSEG shipping data.
The journey would double fuel costs alone to around $2.87 million from $1.26 million, according to Reuters calculations using LSEG data.
Crossing the Suez Canal adds $1 million in fees, according to LSEG.
Saudi Arabia re-routed most of its oil exports from the Gulf to the Red Sea when the U.S.-Iran war disrupted shipments via Hormuz in February. The Houthis attacked ships in the Red Sea this week making the workaround unsafe and encouraging the kingdom to send oil via the Suez Canal.
Big tankers will need to sail via the Suez half empty due to restrictions and top up in the Mediterranean, according to Energy Aspects.
To achieve that, Saudi Arabia could partially unload tankers into the Sumed pipeline, a 320-km (200-mile) oil link bypassing the Suez and connecting Ain Sokhna oil terminal on the Red Sea to Sidi Kerir on the Mediterranean.
The pipeline can transport up to 2.5 million barrels per day out of the kingdom’s total exports of 7 million bpd.
(Reporting by Enes Tunagur, Shadia Nasralla; Editing by Alison Williams)
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