By: AGBI

Saudi Aramco could keep oil exports flowing for up to 10 weeks even if the Strait of Hormuz is closed as the Middle East conflict escalates, by redirecting crude shipments to the Red Sea.

Shipping through the strait has fallen sharply amid Iranian threats, but markets believe Aramco can continue exporting via the Abqaiq-Yanbu pipeline, which allows crude to bypass the Gulf and reach Red Sea terminals.

“It won’t be able to take it all, and some of its capacity is already in use,” said Sasha Foss, energy market analyst at CSC Commodities.

In the best case scenario, though, the pipeline should allow Aramco to redirect nearly 80 percent of the oil that would otherwise flow through the strait and store the remainder to sell when shipping lanes re-open.

About 20 percent of global oil supplies transit through the strait, but unlike other oil companies in the region, the pipeline means that Saudi Arabia has around 5 million barrels a day (bpd) of spare capacity that avoids the Strait of Hormuz, as estimated by the International Energy Agency (IEA).

It should help offset much of the 6.4 million bpd it currently exports through the strait.

“Right now they’re still producing the crude and loading it onto ships,” Foss said. “Any production that isn’t loaded onto the ships goes to the storage terminals.”

At the start of the year, the IEA estimated that Aramco was sending only 2 million barrels west across the country, less than a third of its total capacity.

The company announced in March 2025 that it had completed a long-planned expansion to increase the pipeline’s capacity from 5 million bpd to 7 million bpd, although the pipeline remains untested at this level.

The 745-mile pipeline gives Saudi Arabia the edge over its neighbours. Only the UAE has an alternative export option, through the Abu Dhabi Crude Oil Pipeline which opens up at Fujairah and has spare capacity of just 700,000 bpd, according to the IEA.

Iraq, Kuwait and Qatar, meanwhile, have essentially no way to bypass the strait, cutting off exports.

Since the start of the week analysts have observed oil storage units quickly filling up with unexported oil.

Antoine Halff, the chief analyst at intelligence company Kayrros, said storage units in the region are already above 50 percent capacity, leaving 350 million barrels worth of notional capacity left.

Saudi Arabia controls the lion’s share of this. As of Tuesday, the kingdom had about 150 million barrels of storage available, according to JP Morgan, giving Aramco an additional edge over its neighbours.

The bank suggested in a note that Aramco could last 73 days of the strait being shut before it would have to cut back on drilling, given its option to export via the Red Sea.

“At the moment, these are not lost barrels,” said Norbert Rücker, head of economics and next generation research at Julius Baer. “If trade resumes, these volumes will be delivered.”