The Yemeni blockade deprives Aramco of historic profits, and losses multiply daily

Exclusive Follow-ups – Al-Khabar Al-Yemeni:

Saudi Arabia was planning to exploit the repercussions of the closure of the Strait of Hormuz to achieve unprecedented profits by raising its oil production to more than 9 million barrels per day. However, Sana’a’s imposition of the “siege-for-siege” equation turned the tables, thwarting those ambitions and inflicting heavy losses on the Saudi regime in one of the fiercest blows the Saudi energy sector has received in decades.

According to last year’s statistics, the total daily production of Saudi crude oil was 6.9 million barrels, of which 6.5 million barrels were exported to international markets, while local refineries were supplied with 2.7 million barrels per day, with 1.5 million barrels of petroleum products exported, including 300,000 barrels of gasoline, 686,000 barrels of diesel, and 250,000 barrels of fuel oil.

With the continued geopolitical disruptions in the Strait of Hormuz, oil exports declined and production was cut. Aramco saw the continued closure of the strait as a historic opportunity to compensate for the sharp decline in Gulf countries’ exports and planned to raise production to more than 9 million barrels per day, a step that would have generated fantastic profits, especially with oil prices rising due to supply shortages.

Sana’a’s announcement of imposing a naval blockade on Saudi navigation on July 20 turned the tables on Aramco’s calculations, shifting the battlefront from the Strait of Hormuz to the Red Sea and Bab Al-Mandeb, a step that revealed the fragility of Saudi oil infrastructure and thwarted a plan Riyadh was betting on to compensate for its losses, after its oil exports through Bab Al-Mandeb had jumped eightfold between March and mid-July 2026 compared to the same period the previous year.

Data from the maritime intelligence company “Windward” revealed a 40% decline in oil loading operations at the strategic Yanbu port since July 19, with tankers docked at the port resorting to turning off their Automatic Identification Systems (AIS) to hide their movements and avoid targeting. “Lloyd’s List” confirmed that the movement of Saudi crude oil tankers in the Red Sea has become almost nonexistent, with no crude tankers recorded on this route since July 23, and at least 11 tankers have stopped broadcasting tracking signals off Yanbu port.

Losses reached unprecedented levels, with Yanbu loadings falling to about 2.39 million barrels per day, a 41% decline from the March peak and a 66% drop from the total Saudi export level of 7.96 million barrels per day from the Gulf and Red Sea terminals. Saudi Arabia was forced to ship its crude oil via the “SUMED” pipeline through Egyptian territory, then transport it via the long Cape of Good Hope route to Asian markets, adding about $9 extra to the cost of each barrel, with warnings that this complex alternative route may also be paralyzed if Sana’a expands its operations in the northern Red Sea.

The Joint War Committee (JWC) also expanded the risk area in the Red Sea by about 800 kilometers northward, meaning that calls to northern Saudi ports including Jeddah and Yanbu are subject to additional insurance premiums.

Lloyd’s of London insurers suspended war risk coverage for Saudi-linked ships, pushing Riyadh towards a potential classification as a high-risk country for marine insurance.

Observers believe that the losses being incurred by Riyadh as a result of the Yemeni blockade are multiplying daily, especially with the continuation of preemptive operations targeting mobilizations of Saudi-loyal factions in several Yemeni areas, coinciding with the contraction of the Saudi economy by 4.8% in the second quarter of 2026, and the rise of global oil prices to record levels, placing Riyadh before difficult choices between continuing its aggressive policies or retreating and recognizing the rights of the Yemeni people.