Oil Keeps Flowing From Red Sea As Hormuz Bypass Stays Open

By Weilun Soon and Julian Lee

Jul 24, 2026 (Bloomberg) –Millions of barrels of Saudi Arabian crude are still being shipped from the nation’s Red Sea coast to the global market, despite threats and attacks by Yemen’s Houthi militants against the kingdom’s shipping that have the potential to further destabilize the global oil trade.

Days after the Iran-backed group declared a blockade of Saudi Arabia, Western shipowners appear to be making plans to avoid Bab el-Mandeb strait, at the southern end of the sea, or to sail through it with their transponders turned off. Meanwhile, vessels owned by Iran-affiliated nations like China are still crossing it while hauling Riyadh’s oil. 

Oil tanker owners and traders are on high alert for disruption in the area after Monday’s blockade warning and a subsequent attack on at least one Saudi ships. 

The Red Sea port of Yanbu is one of the oil-market’s most important workarounds while Iran tries to stop oil from flowing through the Strait of Hormuz. The most recent satellite images from the European Union, taken two days after the blockade was announced, show that there were tankers berthed at four of the kingdom’s seven crude export berths. 

A Greek tanker carrying Saudi crude sailed out of the Red Sea with its transponder off when it crossed the Bab el-Mandeb strait, the narrow southern exit route. The Merbabu emerged in the Arabian Sea late Thursday after previously broadcasting its position in the Red Sea, according to ship-tracking data. Lists of vessel charters show it’s heading to India. 

Separately, the New Explorer, a Hong Kong-owned supertanker carrying Saudi crude, was sailing toward Bab el-Mandeb after idling since Tuesday. Two Chinese tankers earlier exited via the same route. Non-Saudi oil traffic in the waterway appeared brisk, with several ships ferrying Russian barrels to India and beyond.

Important Decisions

For western-run vessels handling Saudi oil, however, shipowners are facing tough decisions on whether to risk exiting via Bab el-Mandeb, or take a pricier and longer voyage around the African continent to Asian destinations. That diversion takes them north through the Suez Canal and almost doubles some voyage times.

With the situation in the Red Sea remaining tense, a Denmark-owned products tanker, Torm Innovation, u-turned in the waterway toward the northern route through the Suez after loading at Yanbu, according to tracking data. The vessel is supposed to be heading for Japan, according to fixtures.

Should Torm Innovation exit via the Suez, that would follow a move by Asia-bound liquefied natural gas carrier Gas King, which opted for the diversion two days earlier. The tanker has begun transiting the canal.

The uncertainty in the Red Sea appears to be prompting some Asian oil buyers to consider picking up Saudi cargoes outside of the Red Sea. Some are in talks with Saudi Aramco to potentially reroute flows around Africa.

At least one very large crude carrier has been provisionally arranged to pick up a cargo from Egypt’s northern coast for delivery to South Korea via the Cape of Good Hope, according to reports of the booking seen by Bloomberg, making it the first such charter in years.

Suez Bound

Separately, the Greek-owned very large crude carrier Olympic Luck is also heading north from Yanbu. It’s automated data suggest it’s half full, which would allow it to pass through the Suez Canal without offloading any of its cargo. Fixture data show its destination to be east of Saudi Arabia.

The Houthi attacks open a new front in the Middle East conflict, which already curtailed shipping activity in the Strait of Hormuz coming sharply. On Friday, observable vessel tracking showed that waterway was nearly deserted, with the supertanker Noble appearing to have entered the Persian Gulf with its transponders off. In recent days, three supertankers exited the gulf dark.

The European Union’s naval force has advised merchant ships to turn their transponders off if they called at ports in the kingdom.

Loading activity at Yanbu, Saudi Arabia’s key Red Sea export installation, doesn’t appear to have slowed notably, but it has become more opaque. Tankers are switching off their signals as they approach the loading jetties.

Satellite images from the European Union’s Sentinel 2 orbiter from Wednesday show tankers moored at four of the seven crude berths across the two Yanbu terminals. Only two of those ships were visible on automated tracking systems.

Although automated position signals show no tankers berthed on Friday, the disappearance of ships from tracking screens as they approached the two terminals on Thursday strongly suggests that loading operations are continuing, but activity levels are unlikely to become clear until the tankers reappear, or satellite images become available.

© 2026 Bloomberg L.P.

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This article contains reporting from Bloomberg, published under license.

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