The blockade threat from the Houthis has failed! The signal from the oil tanker "breaks through" the Bab el-Mandeb Strait, and crude oil exports from Saudi Yanbu Port are back to being busy.

As more vessels pass through the Bab el-Mandeb Strait with their tracking signals turned off, Saudi Arabia's key oil export port, Yanbu, seems to be experiencing its busiest day since the Yemeni Houthi rebels threatened to disrupt shipping in the region. After the Middle East conflict hindered shipping in the Strait of Hormuz, Yanbu has become an important hub for Saudi Arabia to maintain large-scale oil exports. Saudi Arabia transports millions of barrels of oil daily to the Red Sea coast via pipeline, bypassing the Strait of Hormuz to export oil to global clients. Satellite images show that last Saturday, five Very Large Crude Carriers (VLCCs) docked at the oil loading terminal in Yanbu a VLCC can typically carry around 2 million barrels of oil, possibly making it the most active day since the Iranian-backed Houthis implemented a blockade on Saudi ports two weeks ago. At the same time, according to data from shipping analytics companies Vortexa and Kpler, the Suezmax tanker "Lesvos," owned by a Greek shipowner, and the Very Large Crude Carrier "Desh Vaibhav," registered under the Indian flag, traversed the Bab el-Mandeb Strait last weekend with their Automatic Identification System (AIS) signals turned off, carrying Saudi oil loaded at Yanbu. Vessel tracking data indicates that these two tankers had previously broadcasted their signals near Red Sea ports and have now reappeared in waters near Oman. Currently, some tankers are still openly passing through the Bab el-Mandeb Strait, including vessels transporting Russian oil. Additionally, two batches of Saudi crude oil, one batch of Algerian oil, and one batch of Sudanese cargo have crossed the strait with their tracking signals turned off. However, the threats from the Houthis have forced some Saudi tankers to take longer routes around Africa, while Saudi Arabia has redirected some of its oil transport routes originally bound for Asia from the Red Sea to the port of Sidon on the Mediterranean coast of Egypt. Nonetheless, crude oil continues to flow out of the Persian Gulf, with most tankers relying on the turned-off AIS signals for transportation. According to vessel tracking data, over 8.4 million barrels of crude oil left the Persian Gulf last Friday, one of the highest daily export levels since the outbreak of the Middle East conflict at the end of February. It is worth mentioning that U.S. President Trump announced the cancellation of a large-scale military attack on Iran and stated that negotiations aimed at reopening the Strait of Hormuz will resume soon. Meanwhile, OPEC+ approved a slight increase in production of about 188,000 barrels per day starting in September, officially completing a gradual withdrawal from a round of voluntary production cuts since last year. Amid expectations of easing geopolitical tensions and normalizing supply, panic in the oil market has suddenly cooled. As of the time of writing, Brent crude futures fell by 4.48% to $83.99 per barrel; WTI crude futures fell by 5.57% to $79.95 per barrel. Despite the glimmer of hope for peace talks, the navigation risks in the Strait of Hormuz have not dissipated. The UK Maritime Trade Operations Office reported last week that a tanker near Oman experienced a close-range explosion, and with one LNG carrier having been hit by a projectile last week, it underscores that this vital artery, which normally carries about one-fifth of the world's oil and LNG, remains fraught with uncertainties. Very limited observable shipping activity was noted in this critical strait on Monday. Meanwhile, Gulf oil-producing countries are actively seeking alternative export routes. The Iraqi Ministry of Oil stated that Turkey and Iraq have agreed to extend a previously defunct oil pipeline agreement for another year, which can export up to 750,000 barrels of crude oil daily. In Kazakhstan, the energy ministry announced that the Caspian Pipeline Consortium resumed normal operations on August 1, with a daily throughput of 100,000 tons of oil, as the effects of previous temporary suspensions gradually fade. However, the actual pace of exports still depends on whether tankers dare to navigate the black sea-related facilities at risk of attack, as a series of attacks on tankers loading nearby have severely disrupted this key export channel for Kazakh oil.