The oil market scrambles for Hormuz alternatives – from Red Sea to Brazil

With the Strait of Hormuz in turmoil, the global oil industry has scrambled to find alternative trade routes — and we can watch the results using high-frequency shipping data in near-real time.

Saudi Arabia has begun rerouting crude exports to its Red Sea port of Yanbu via its strategic East-West pipeline. Lloyds’ List Intelligence data shows the result: shipments from Yanbu have been significantly higher than prior years’ levels, helping offset the diminishing exports from east coast ports such as Ras Tanura and Al Jubail.

(To be sure, the Red Sea route is not without complications, especially for eastbound shipments to Asia’s import-dependent energy users. Iran-backed Houthis based in Yemen have been threatening to hit vessels transiting the Bab-el-Mandeb Strait.)

Meanwhile, Asian and European economies are seeking more supplies from the US Gulf Coast, Brazil and West Africa. The ports of Corpus Christi and Houston— the largest US energy export gateways — have seen surging departures.

In Brazil, the Port of Acu (the leading private export hub) has also seen activity rise significantly.

The record US oil exports have driven a tanker shortage along the Gulf Coast — and that’s having a knock-on effect for freight rates globally, as our last chart shows.

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