Saudi Arabia Redirects Oil Through Strait of Hormuz as Red Sea Traffic Plummets Amid Regional Conflict

Oil flows through the Strait of Hormuz climbed to their highest level this month since the Iran war began, driven by Saudi Arabia's decision to route more crude through the contested waterway after Houthi attacks severely restricted its Red Sea path.

According to preliminary Kpler data, Saudi shipments via Hormuz surged to 2.58 million barrels per day in September, up from approximately one million bpd in August, granting the kingdom 43 percent of the strait's total oil traffic. This spike coincided with a more than 50 percent drop in flows through the Bab Al Mandeb strait, which fell to 2.56 million bpd from 5.45 million bpd in August.

Following US and Israeli strikes on Iran on February 28 that resulted in Tehran effectively shutting Hormuz, Riyadh initially relied on its five million bpd East-West pipeline to transport crude across the country to the Red Sea port of Yanbu. Tankers then moved the oil south through Bab Al Mandeb toward Asian markets, pushing Saudi flows through that strait to 3.99 million bpd in June.

Despite the shift, regional oil traffic overall continued to decline. Combined export volumes through Hormuz, Bab Al Mandeb, and the Suez Canal dropped to 9.99 million bpd in September from 12.17 million bpd in August, placing flows 61 percent below February figures and near the wartime low of 9.95 million bpd recorded in May. Saudi Arabia contributed roughly 3.7 million bpd to the September aggregate.

The Red Sea route encountered mounting pressure starting July 20, when Yemen's Houthis announced a naval blockade on Saudi shipments, threatening vessels tied to Saudi Arabia, Israel, and the US. In August, a missile strike on the cargo ship Tihamah killed six people and caused Saudi flows through Bab Al Mandeb to plunge to 0.45 million bpd. Furthermore, a September 10 drone attack on the East-West pipeline forced a halt to Yanbu crude loadings beginning September 11. Although Saudi Arabia has since restarted the pipeline and resumed loadings at Yanbu, volumes continue to lag behind pre-attack levels.

Data from Kpler indicates that excluding Saudi Arabia, shipments through the strait dropped 29 percent to 3.44 million bpd in September. Kuwait experienced a greater than 50 percent decline, the UAE saw shipments drop by 43 percent, and Iraq recorded a 23 percent reduction. Meanwhile, Iran transported a mere 100,000 bpd under the US naval blockade, a sharp drop from 2.5 million bpd in February.

Diplomatic efforts have failed to restore normal shipping routes. During the UN General Assembly, Iranian Foreign Minister Abbas Araghchi proposed reopening Hormuz within seven days if Washington removed its blockade and sanctions. However, US President Donald Trump rejected the proposal on September 26, claiming Iran wanted to open the strait because they are struggling significantly, while also noting that discussions could persist.

Overall, total flows through Hormuz remain under a third of February's 20.64 million bpd, underscoring ongoing disruptions to the primary oil export corridor in the Gulf. The Kpler statistics do not include tankers navigating with their transponders turned off.