Bloomberg: Tankers divert to Egypt as Houthi threat disrupts Red Sea

Empty supertankers are heading to Egypt’s Mediterranean port of Sidi Kerir to collect Saudi Arabia’s crude, a signal of wariness among some shipowners about sailing closer to Houthi-threatened waters, Bloomberg writes.

At least eight very large crude carriers are signaling Sidi Kerir and are set to arrive in the coming weeks through to mid-August, ship-tracking data shows. State-owned Saudi Aramco has been offering more oil from the Egyptian port after Iran-backed Houthis struck a vessel in the Red Sea last week.

Oil tankers with a transport capacity of 5 million barrels were either at, or just leaving, the kingdom’s Red Sea port of Yanbu on Monday, Copernicus Sentinel/ESA satellite images show. The export hub became crucial after the Iran war started, allowing the kingdom to bypass the Strait of Hormuz by piping million of barrels a day to its west coast for export to global customers.

Some shipowners may be hesitant to sail to Saudi Arabia after some insurance providers began restricting coverage for any vessels calling at the kingdom’s ports due to the risk of attacks, according to ship and insurance brokers.

The Marshall Islands-flagged very large crude carrier Bidbid is currently sailing to Sidi Kerir and is expected to pick up its cargo on Wednesday for delivery to Asia, shipping data shows. Two others, VL Bright and Taga, were heading for the US before switching their destinations to the Egyptian port, with the latter sailing almost exclusively on voyages to Japan in recent months.

The remaining five Sidi Kerir-bound ships are all controlled by South Korea’s Sinokor Group, a privately-held company that has been among the most active in Hormuz since the Iran war started at the end of February.

Sinokor, Bidbid’s manager Asyad Shipping, VL Bright’s owner Hyundai Glovis, and Taga’s owner Nippon Yusen KK didn’t immediately respond to requests for comment.

For a vessel to collect Saudi crude from Sidi Kerir, oil is usually picked up at Yanbu by a tanker and then transported to the Egyptian port of Ain Sukhna in the Red Sea. From there, it’s pumped north to the country’s export hub on the Mediterranean via the Suez-Mediterranean Pipeline, known as SUMED.

Supertankers are racing from different parts of the world to reach Egypt’s Sidi Kerir, where Saudi Arabia is known to export some of its crude
Source: Bloomberg

Once it’s dropped off oil at Ain Sukhna, a VLCC can then sail through the Suez Canal part laden and then fill up again at Sidi Kerir.

Saudi Arabia has been rushing to export more oil through the northern route out of the Red Sea after Yemen-based Houthi rebels implemented a blockade and then attacked vessels along the southern route near Bab el Mandeb. Traffic through the strait remained brisk on Monday, according to data compiled by Kpler, with ships carrying Russian crude transiting.

There is also a cluster of 10 empty Saudi VLCCs in the Gulf of Aden. Four of them last signaled their location on the industry’s Automatic Identification System on Tuesday, one did so on Monday. The rest did so on Sunday or earlier, making it harder to monitor their movements.

Over the past week, Chinese ships and vessels owned by countries friendly with Iran have visibly continued to transit Bab el Mandeb, while western tankers and more risk-averse Asian shippers have opted for the costlier and longer route north via the canal.

In the Strait of Hormuz, observable traffic was scant. Rotterdam Energy, a supertanker controlled by Sinokor, showed up in the Persian Gulf after last broadcasting from the Gulf of Oman, a sign that it may have entered the region with its transponders off.

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