Key facts
- Saudi Arabia condemned a drone attack on two ships in Egypt's Damietta Port.
- The attack has raised concerns about the security of the Suez Canal and Sumed pipeline.
- These routes are crucial for Saudi Arabian oil exports, especially since the start of the Iran war.
- Houthi threats have already disrupted traffic through the Red Sea and Bab el-Mandeb.
- Crude loadings via the Sumed pipeline have increased substantially in July.
Saudi Arabia has condemned a drone attack that damaged two ships at Egypt's Damietta Port, expressing full solidarity with Cairo and support for its security measures. The incident has heightened energy security concerns, particularly regarding the Suez Canal and the Sumed pipeline, which are vital for Saudi oil exports, especially since the onset of the Iran war.
While no group has claimed responsibility, the attack on the gas tankers near the Mediterranean entrance to the Suez Canal has added to market worries. This comes amid ongoing threats from Iran and its Houthi allies against shipping in the Strait of Hormuz and Bab el-Mandeb. The Suez Canal and Sumed pipeline have become critical northbound export routes for Saudi energy cargoes, as many tankers now avoid the Strait of Hormuz, which previously handled about a fifth of global oil and LNG supply.
Data shows a significant increase in crude loadings from the Sumed pipeline in July compared to April. Despite the attack, oil prices declined, influenced by talks between Iran and Oman. Iran has previously threatened to halt Middle Eastern energy exports, and both Iran and the Houthis have demonstrated capabilities that could threaten the canal zone.