Saudi Arabia’s $5 Oil Detour Is Expensive—and Worth It
The latest Saudi oil route looks absurd on a map. Crude moves west across Saudi Arabia to Yanbu, north through the Red Sea to Egypt, across the SUMED pipeline from Ain Sokhna to Sidi Kerir, then west through the Mediterranean before tankers sail around the Cape of Good Hope to reach customers in Asi
Source: OilPrice.com
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DW NOTE
Saudi Arabia is offering customers a $5/barrel discount off Brent to hold market share while the Strait of Hormuz is closed and prices are elevated. It's expensive insurance: the Kingdom is leaving roughly $1.5 billion per month on the table at current export volumes. But if the Strait reopens and prices collapse back toward pre-crisis levels, those customers will remember who kept them supplied — and who tried to profiteer.