Francesco Di Costanzo
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(13) Pipelines Were Never the Answer. Ports Were.

/5 min read

A Pipe Does Not Export a Barrel

Saudi Arabia’s East–West system can temporarily move 7 million barrels a day toward the Red Sea, yet Yanbu can export only around 5 million barrels a day at maximum after west-coast refinery demand. The distinction matters because the Hormuz debate often treats capacity inside a pipe as oil already available to a customer. The barrel still needs compatible storage, a terminal slot, a tanker, insurance and a safe route from the loading berth.

The IEA’s own language is more careful than the headline number. It estimates 3.5–5.5 mb/d of capacity that could redirect crude through Saudi Arabia and the UAE, then warns that the logistics and supply chains for substantial rerouting remain untested at this scale. Its Saudi range also depends on operating conditions and available export capacity on the west coast. The relevant unit of analysis is a working export chain. A pipe’s design rate does not provide the answer.

Yanbu Sets Saudi Arabia’s Practical Ceiling

The Saudi case makes the gap visible. EIA describes the ordinary East–West crude line as a 5 mb/d system, temporarily expanded to 7 mb/d by converting NGL lines. Reuters reported in late March that it was operating at that emergency rate. Reuters also reported that roughly 5 mb/d could be available for export, because the rest supplied local refineries, while Yanbu itself could export around 5 mb/d at maximum. A pipeline may have spare hydraulic capacity and still fail to create another export cargo.

Loading data show the system working hard rather than sitting idle. Yanbu averaged 3.3 mb/d of crude loadings in March, up from less than 0.8 mb/d in February, according to Kpler data reported by Reuters. Argus estimates nominal terminal loading capacity at about 4.5 mb/d across Yanbu North and South, while market sources cited by Argus put effective capacity closer to 4 mb/d. Argus also reports lower storage than Ras Tanura and limits on the crude grades the terminal can handle. The exact ceiling remains uncertain, but it is below a simple reading of 7 mb/d of pipe throughput.

Fujairah Adds Limited Relief

The UAE demonstrates a different constraint. ADCOP links onshore fields to Fujairah outside Hormuz and can carry up to 1.8 mb/d. EIA says that regular use of the line had already reduced the excess capacity available for a crisis reroute. Reuters reported Fujairah exports of 1.62 mb/d in March, versus 1.17 mb/d in February, citing Kpler data. The increase is meaningful relief, yet it leaves little room beside a pre-existing export stream.

The evidence does not support a clean claim that Fujairah’s berth capacity alone capped the UAE route. It does show that the terminal is part of the operational risk: Reuters reported that drone attacks interrupted loading there in March. Security, access to tankers and storage can constrain deliveries before a nameplate pipeline limit does. Treating ADCOP as 1.8 mb/d of instantly deployable new supply would therefore overstate the redundancy that Fujairah offers.

The Gap Is an Export-System Gap

The scale of the problem explains why these distinctions moved markets. EIA measured about 20 mb/d of oil flows through Hormuz in 2024. In March, the IEA said flows had fallen from around 20 mb/d before the war to a trickle, alongside limited bypass capacity and filling storage. Reuters and Kpler estimated that combined crude, condensate and refined-fuel exports from eight Middle Eastern countries fell 61% in the week to 15 March from the February average. The bypass routes could not recreate the waterway’s throughput.

Pipelines still mattered. Saudi Arabia sharply increased Red Sea loadings and the UAE shifted more oil to Fujairah. For resilience planning, pipe capacity is one input to export capacity. It cannot substitute for the rest of the export chain. Any resilience plan that counts only pipe capacity will overstate the barrels available until terminals, storage, tanker scheduling and security have been tested at the same rate.

Sources

Intergovernmental and government analysis

  1. International Energy Agency, "Strait of Hormuz" https://www.iea.org/about/oil-security-and-emergency-response/strait-of-hormuz

  2. International Energy Agency, "Oil Market Report - March 2026" https://www.iea.org/reports/oil-market-report-march-2026

  3. U.S. Energy Information Administration, "Amid regional conflict, the Strait of Hormuz remains critical oil chokepoint" https://www.eia.gov/todayinenergy/detail.php?id=65504

Market reporting and industry analysis

  1. Reuters, "Saudi boosts Yanbu crude oil exports as it works around Hormuz halt, data shows" https://www.reuters.com/business/energy/crude-exports-saudis-yanbu-port-surged-near-4-mln-bpd-last-week-data-shows-2026-03-24/

  2. Reuters, "Crude loadings at Saudi's Yanbu port have continued despite pipeline attack, trading sources say" https://www.reuters.com/business/energy/crude-loadings-saudis-yanbu-port-have-continued-despite-pipeline-attack-trading-2026-04-09/

  3. Reuters, "Saudi pipeline pumping 7 million bpd of oil, bypassing Hormuz, Bloomberg News reports" https://www.reuters.com/business/energy/saudi-pipeline-pumping-7-million-bpd-oil-bypassing-hormuz-bloomberg-news-reports-2026-03-28/

  4. Reuters, "Alternative routes for Middle East oil and gas due to Hormuz disruption" https://www.reuters.com/business/energy/alternative-routes-middle-east-oil-gas-due-hormuz-disruption-2026-04-21/

  5. Reuters, "UAE's new oil pipeline push to double export capacity bypassing Hormuz" https://www.reuters.com/business/energy/uae-accelerate-oil-pipeline-project-help-bypass-hormuz-2026-05-15/

  6. Reuters, "Middle East oil exports drop at least 60% as Hormuz stays mostly closed, data shows" https://www.reuters.com/business/energy/middle-east-oil-exports-drop-least-60-hormuz-stays-mostly-closed-data-shows-2026-03-16/

  7. Argus Media, "Yanbu gives Aramco limited option for rerouting crude" https://www.argusmedia.com/en/news-and-insights/latest-market-news/2798868-yanbu-gives-aramco-limited-option-for-rerouting-crude