LONDON / RIYADH — As the conflict between the U.S., Israel, and Iran nears its one-month mark, the global energy map is being redrawn by necessity. Saudi Aramco, the world’s largest oil exporter, has informed refiners in India and China that they will receive significantly lower crude volumes in April as the war continues to paralyze traditional shipping routes.
The move comes as the Strait of Hormuz remains a volatile “no-go” zone for many, forcing Saudi Arabia to rely on a partial—and limited—workaround via its Red Sea ports.
The Numbers: April Export Projections
Traders familiar with the allocations suggest a sharp drop in shipments compared to pre-war levels in February:
| Destination | April Estimate (Barrels) | February Actuals (Barrels) | % Decrease (Approx.) |
| China | 40 Million | 48 Million | -17% |
| India | 23 Million | 25–28 Million | -12% to -18% |
In Europe, the situation is even more dire; at least two major refiners seen their April volumes cut, with one reportedly receiving no supply at all.
The “Yanbu” Workaround
With the Persian Gulf effectively bottlenecked, Saudi Aramco is rerouting supplies through its East-West Pipeline to the port of Yanbu on the Red Sea. However, this strategy has significant limitations:
- Capacity Gap: Yanbu can export roughly 5 million barrels a day, far short of the 7.2 million barrels Saudi Arabia was shipping globally before the conflict.
- Grade Restrictions: Asian refiners are reportedly being offered only Arab Light crude through Yanbu, limiting the flexibility of refineries designed for heavier or medium grades.
- Pricing Surge: These logistical hurdles, combined with the war, have pushed Brent crude to over $104 a barrel, a massive jump from the $72 seen before February 28.
Economic Warning: “Underestimating the Risk”
The supply crunch isn’t just a logistical headache—it’s an economic threat. BlackRock Inc. President Rob Kapito warned on Thursday that the market may be failing to price in the long-term inflationary damage of the Iran war.
Even if a truce is reached soon, the damage to energy infrastructure and the shift in trade routes are expected to weigh on global growth for the remainder of 2026. For India and China, the immediate challenge will be sourcing “alternative barrels” to fill the Saudi gap, likely leading to a frantic search for supply from West Africa or the Americas.
