Saudi Arabia Activates Hormuz Bypass for China-Bound Oil, but Analysts Warn of Limited Capacity and Lingering Risks
Saudi Arabia has begun rerouting crude oil exports through its Red Sea port of Yanbu, offering tankers — including Chinese supertankers — an alternative path that bypasses the Strait of Hormuz, now effectively closed by Iran following United States and Israeli military strikes. But energy analysts caution that the workaround can only partially absorb the shock to global oil flows, and that security risks along the alternative route remain far from negligible.
Reporting by the South China Morning Post (SCMP) on 18 March tracks the movement of New Vista, a very large crude carrier (VLCC) owned by China Merchants Energy Shipping, as a concrete example of the emerging diversion strategy. The vessel approached the Strait of Hormuz on 1 March — the same day at least three tankers near UAE and Omani ports were struck by projectiles, causing fires and crew casualties — and chose not to transit. It instead redirected toward the Red Sea, arrived at Yanbu on 11 March, loaded, and departed two days later, now bound for Quanzhou in Fujian province with an expected arrival of 3 April.
The movement is not an isolated case. Saudi Aramco announced last week it was channelling a larger share of its crude output through its East-West Pipeline — rated at 7 million barrels per day — to Red Sea terminals, explicitly to avoid Persian Gulf export infrastructure. According to the SCMP, five tankers had already loaded or completed loading at Yanbu, collectively carrying over 10 million barrels of Saudi crude destined for China, with a further 17 vessels scheduled to lift an additional 35 million barrels from the port later this month.
China's exposure is significant: in 2025, the country imported more than 584 million barrels of Saudi crude, making it Aramco's most important single customer.
Yet the scale of the diversion underscores its inherent limitations. Xu Muyu, a senior crude oil analyst at Kpler, told the SCMP that Yanbu port can sustainably handle around 4.5 million barrels per day — already below Saudi Arabia's average 2025 export rate of 6.2 million barrels per day, and far short of the roughly 14.5 million barrels per day of non-Iranian crude that passed through Hormuz before the conflict began.
The Red Sea corridor also carries its own security burden. Iran has designated US naval assets in the area as potential targets, and Yemen's Houthi movement — which spent much of 2024 attacking commercial vessels in response to Israel's war in Gaza — has not formally stood down. The UK Maritime Trade Operations Centre issued a warning this week that the threat level across the Red Sea remains "substantial."
Xu noted that while no tankers crossing the Bab el-Mandeb had been attacked by the Houthis since the Iran war began, he stopped short of ruling out future incidents, particularly for vessels with perceived ties to the United States or its allies.
For China, the Yanbu route offers a partial lifeline — but not a durable solution.
Artwork: Gemini