DUBAI-Saudi Arabia spent months rerouting oil across the desert to circumvent the Strait of Hormuz. Now, with its Red Sea bypass route disrupted by attacks, the world's oil kingpin is having to return to the waterway it was trying to avoid in the first place.
Saudi Aramco, the country's state-controlled oil giant, is loading more oil onto tankers in the Persian Gulf and then taking its chances sending them through the Strait of Hormuz. The company has told several of its customers in Asia-its most important oil market-to pick up shipments just outside the strait off the coast of Oman, people familiar with the matter said.
The risky attempts to run the gantlet through the Strait show how the U.S. and its Gulf allies are struggling to keep critical oil routes clear when Iran and its allies can severely disrupt them with missiles and drones. The efforts are bringing the Saudis head-to-head with Iran, which is attacking ships in the waterway in hopes of shutting it down.
On Monday, a tanker entering the strait was struck by an unknown projectile, injuring two crew members, according to U.K. Maritime Trade Operations, or UKMTO, which is affiliated with the Royal Navy. Another tanker was hit by debris, UKMTO said. Earlier this month, two supertankers carrying Saudi crude were struck by unknown projectiles within minutes of each other as they sailed out of Hormuz.
The stakes for the global economy and the Trump administration ahead of the November midterm elections are high. The disruptions to oil supplies have pushed up the cost of gasoline and diesel, heightening inflation fears and angering voters.
The U.S. military has managed to suppress Iranian attacks enough to get millions of barrels of oil through Hormuz each day. But attacks by the Iran-backed Houthi militants and from Iraq are cutting into the impact of that progress by shutting off other routes for supplies.
"This is a reminder that bypass channels aren't infallible," said Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security, a Washington think tank. "All of the options have their issues and costs, with tanker rates and insurance rising along with physical risk."
Gulf producers from the United Arab Emirates to Iraq are racing to build alternative routes for their crude. Those workarounds are keeping Gulf barrels moving, but they are tying up tankers, driving freight rates higher and, in Saudi Arabia's case, not sustainably alleviating blockages that have left its oil production at a multidecade low.
The cost of transporting crude from Saudi's Ras Tanura port inside the Persian Gulf to China's Ningbo port has surged from around $4.5 million to nearly $63 million a trip, according to Michael Haigh, head of commodities research at French bank Société Générale.
Before the Iran war, Saudi Arabia sent most of its oil exports through the Strait of Hormuz and onward to customers in Asia. As Iranian attacks on ships choked off that waterway, the kingdom shifted millions of barrels through its East-West Pipeline to the port of Yanbu on the Red Sea.
When the Iran-backed Houthi militants stepped up attacks on Saudi-linked shipping around the Bab el-Mandeb in July, some Saudi cargoes were rerouted north through Egypt, using the Suez Canal and Sumed pipeline system instead.
The most recent scramble was triggered by drone attacks from Iraq earlier this month that shut the East-West pipeline.
Without it, Saudi Arabia is increasingly falling back on an elaborate system of loading crude at its Persian Gulf terminal of Ras Tanura, shuttling it through Hormuz, transferring it to ships off the coast of Oman for distribution to its customers on global markets, then going back for more.
In the past two weeks, around 2.4 million barrels of Saudi crude and condensate a day were again flowing through the Strait of Hormuz, according to ship tracker Kpler, a level last seen in early July before the Houthi militants announced a maritime blockade of Saudi Arabia and began attacking Saudi shipping in the Red Sea.
The four-week average daily Saudi crude oil loadings from inside the Persian Gulf rose to more than 2 million barrels last week, compared with virtually zero for most of June and fewer than 1 million barrels a day in July, according to data provider Vortexa.
Meanwhile, loadings from Red Sea terminals have dropped to zero since the attacks on the East-West pipeline earlier in September. Saudi Arabia had already cut loadings from its Yanbu port in August after the Houthi militants declared a blockade of Saudi Arabian ports and ships in late July.
"We are definitely seeing Saudi loading more crude out of Ras Tanura and shuttling it through," said Richard Matthews, director of consulting and research at shipbroker E.A. Gibson. Saudi Arabia didn't do it before because it had options, he said, but those options don't exist now.
Matthews said that the demand for vessels to do shuttle runs has increased so much that some older 20-year-old supertankers-including some that were part of the global shadow fleet of aging tankers that have crisscrossed the world smuggling oil for sanctioned sellers-are now joining the shuttle runs.
Saudi Aramco is preparing to lean heavily on those transfers for now, the people familiar with the matter said. The company has been talking to customers in China, South Korea and Japan about picking up Saudi crude off the Omani port of Sohar. Buyers face higher shipping costs, but the kingdom is expected to offset at least some of that cost for customers by charging lower prices, the people said.
"Building a bypass does not necessarily solve the problem, it can simply create a new set of targets," said Danny Citrinowicz, a former Israeli military intelligence official and senior researcher at the Institute for National Security Studies in Tel Aviv. "There is no silver bullet, and you can't beat geography."
The attacks on the Red Sea workaround are complicating hopes that Gulf states can simply build their way out of dependence on Hormuz. U.S. Treasury Secretary Scott Bessent said this month that new pipelines would make the strait a "worthless piece of water" within two years as oil moves overland instead.
But on Sunday, Saad Sherida Al-Kaabi, the energy minister of Qatar, which before the war exported its copious amounts of liquefied natural gas via Hormuz, pushed back on the idea.
"This is completely wrong," he said at the Qatar Economic Forum in New York. "This waterway carries trade in all products, not only oil and gas, to and from all its adjacent countries."
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