Iraq and Saudi Arabia divert fuel oil supplies to alternative ports

 Iraq and Saudi Arabia Shift Export Routes

Iraq and Saudi Arabia are redirecting fuel oil supplies to other ports as they try to work around disruption linked to the Strait of Hormuz. Reuters reported that this diversion helped push Middle East fuel oil exports toward a four-month high in June, even though overall volumes still remain well below pre-war norms.

That matters because it shows regional producers are not waiting for a full return to normal shipping patterns. Instead, they are using alternative routes to keep cargo moving while the Gulf’s main chokepoint recovers only gradually.

Iraq Uses Syria’s Baniyas Port

Reuters reported that Iraq began exporting fuel oil from Syria’s Baniyas port for the first time in March, and those shipments hit a record high of more than 600,000 tons in June. Before the war, Iraq mainly exported fuel oil from Khor al-Zubair, but the workaround has involved trucking millions of barrels across Syria before re-exporting them from Baniyas.

That shift is significant because it gives Iraq a strategic alternative to Hormuz. It also shows how far exporters are willing to go logistically to preserve trade flows in a disrupted market.

Saudi Arabia Leans on Yanbu

Saudi Arabia is also rerouting supply. Reuters reported that the kingdom is set to export more than 300,000 tons of fuel oil in June from the Red Sea port of Yanbu, a five-month high after supplies were diverted there.

That move highlights the value of Red Sea infrastructure at a time when Gulf routes remain uncertain. By using Yanbu more heavily, Saudi Arabia is reducing its dependence on the most vulnerable shipping corridor in the region.

The Rebound Is Real, but Still Limited

Middle East exports are projected to reach about 2.4 million metric tons in June, or roughly 508,000 barrels per day, up more than 20% from May. But Reuters reported that this is still far below the pre-war monthly average of 5.5 million to 6 million tons.

That gap shows the recovery is partial rather than complete. Fuel oil flows through Hormuz are expected to improve over the next 60 days, but analysts told Reuters that the rebound is unlikely to be substantial because shippers remain cautious and uncertainty over the durability of the peace deal is still high.

What Comes Next

The next question is whether alternative port strategies can keep supporting exports while Hormuz traffic slowly normalizes. If rerouted cargoes continue moving through Baniyas, Yanbu, and other outlets, regional supply could keep improving even without a full recovery in the strait.

If shipping risk persists, however, these workarounds may not be enough to restore exports to pre-war levels anytime soon. For now, the clearest takeaway is that Iraq and Saudi Arabia have found ways to move more fuel oil, but the regional system is still operating under stressed and improvised conditions.