In early August, Saudi crude oil inventories rose to around 75 million barrels, up from 61 million in June, as export options narrowed.

In August, Saudi Arabia's crude oil exports fell to approximately 3 million barrels per day, which is the lowest level recorded since early 2017. However, according to a Bloomberg tanker-tracking estimate, this figure may change as more voyages and ship-to-ship transfers are discovered. The same estimate suggests that tanker attacks have disrupted the kingdom's main shipping routes through the Strait of Hormuz and the Red Sea.

As Hormuz traffic contracted

As Hormuz traffic contracted, Saudi Arabia had shifted large volumes west through its East-West Pipeline, which is 1,200 km long. Crude oil exports from Yanbu increased from approximately 770,000 barrels per day (bpd) in January to 4.3 million bpd in June, before falling to 3.7 million bpd in July and around 2.25 million bpd in August. Exports from the Persian Gulf, which had recovered to around 800,000 bpd in July, also fell in August. Meanwhile, Saudi crude movements through Bab el-Mandeb decreased from over 3.5 million bpd in early July to almost zero in August. 

Related: Saudi Arabia launched an international logistics corridor linking eastern ports in the Gulf with Jordan.

 The Saudi-flagged VLCC Sidr

On 31 August, the situation worsened when the Saudi-flagged VLCC Sidr, operated by Bahri, and the Liberia-flagged Senegal Prosperity, associated with the South Korean shipping company Sinokor Maritime, were hit by unidentified projectiles while sailing out of the Strait of Hormuz.  Each tanker had loaded around two million barrels of Saudi crude oil at Juaymah. Two Filipino seafarers aboard the Sidr were killed.  Saudi Arabia attributed the attack on the Sidr to Iran.

The threat level in Hormuz

The threat level in Hormuz has been classified as severe by the Joint Maritime Information Center, with commercial traffic still below its historical baseline and single-digit vessel movements in both directions being shown by independent tracking. The Red Sea route has also been subject to pressure, prompting adjustments to Saudi crude flows. In July, deliveries to Egypt’s Ain Sukhna reached 1.32 million barrels per day (bpd), while departures from Sidi Kerir on the Mediterranean reached 2.4 million bpd in the first week of August. Some cargoes bound for Asia have been diverted around the Cape of Good Hope, adding around 40 days to the journey.  In early August, Saudi crude oil inventories rose to around 75 million barrels, up from 61 million in June, as export options narrowed.

The price of Brent crude oil

Tensions escalated this week after the US struck military targets in Iran. Tehran responded by firing projectiles at Gulf countries housing American bases. The price of Brent crude oil pushed back above $95 a barrel in London, the highest since late July, reviving concerns about inflationary pressures and the risk of interest rate hikes.

Saudi Arabia's crude oil Red Sea route Iran Persian Gulf  Strait of Hormuz Ain Sukhna Cape of Good Hope Maritime Information Center Bloomberg #Bahri,# VLCC Sidr