Bab el-Mandeb emerges as Asia's new refining chokepoint

Renewed security threats around the Bab el-Mandeb Strait have increased the risk to Asian refinery operations. With vessel diversions already underway, any prolonged disruption could delay crude arrivals, tighten refinery feedstock availability, and provide further support to refined product margins.

‍

The latest security escalation around the Bab el-Mandeb comes at a critical time for Asian refiners. Since disruptions in the Strait of Hormuz (SoH), the corridor has become a key route for Saudi crude exported via Yanbu and Russian crude destined for Asia.

Around 6 mbd of crude now transits the Bab el-Mandeb to Asia, with nearly all recent growth driven by Saudi Arabia. Saudi Arabia's Yanbu exports reached around 4.1 mbd in June, rerouting roughly 64% of volumes that would otherwise have been exported via Ras Tanura and the Strait of Hormuz. Meanwhile, the Red Sea has become the primary route for western Russian crude grades, particularly Urals, moving to Asia, with India accounting for the largest share of imports, alongside buyers in China and Brunei.

Asia crude imports via Bab El Mandeb, origin-wise (kbd)

Source: Kpler

The exposure is highest for India, where more than 50% of crude imports currently transit the Bab el-Mandeb. Other major Asian importers also rely on the corridor, including Pakistan (36%), Philippines (37%), South Korea (31%), Japan (28%), Taiwan (22%), and China (19%).

‍

Asia’s crude imports via Bab El Mandeb (kbd)

Source: Kpler

Note: Import data is average since April

The latest escalation has already prompted vessel diversions and heightened operational caution among shipowners. While physical crude flows have yet to be materially disrupted, continued diversions would increase voyage times, freight costs and insurance premiums, gradually tightening crude availability for Asian refiners.

Despite ongoing disruptions in the Strait of Hormuz, Asia ex-China refinery runs have recovered to around 90-95% of pre-escalation levels, supported by stronger Russian crude flows, higher Saudi exports via Yanbu and subdued Chinese crude buying. Any escalation and prolonged disruption at the Bab el-Mandeb would undermine this recovery, tighten feedstock availability, and force refinery run cuts across Asia ex-China (at a scale of 3-4 mbd in August -September). With global spare refining capacity already limited, lower refinery throughput would quickly tighten already constrained global refined product balances and provide further support to product cracks and refining margins.

‍