Red Sea fix? China-bound oil tankers tap Saudi plan to bypass Strait of Hormuz

Saudi Arabia is activating its Red Sea “Plan B” to divert crude via the port of Yanbu, allowing tankers – including Chinese very large crude carriers (VLCCs) – to bypass the Strait of Hormuz, though analysts warn the route has limited capacity.The move comes after Iran effectively closed the strait in response to United States and Israeli military strikes, a conflict now in its third week that has rattled global energy markets.New Vista, a VLCC owned by China-merchants-energy-shipping" class="entity-link entity-organization" data-entity-id="46121" data-entity-type="organization">China Merchants Energy Shipping, had departed from Yanbu and was bound for Quanzhou in south China’s Fujian province, where it is expected to arrive on April 3, according to vessel-tracking data platform Myvessel.The oil tanker had approached the Strait of Hormuz on March 1 but did not transit the strategic waterway. That same day, at least three tankers near ports in the United Arab Emirates and Oman were struck by projectiles, causing fires and crew casualties.New Vista instead altered course towards the Red Sea, arriving at Yanbu on March 11 and departing on March 13 after loading. More tankers in the Red Sea are now en route to the port for similar crude oil pickups.Saudi Aramco, the world’s leading oil producer, announced last week that it was redirecting a larger share of crude flows to the Red Sea through its 7 million-barrel-per-day East-West Pipeline to bypass Persian Gulf export terminals.“The Yanbu route is open to all international buyers, but China-bound cargoes are expected to take a significant share, given that China is a major customer of Saudi Aramco,” said Xu Muyu, a senior crude oil analyst at Kpler.