Jeddah port offers supply-chain lifeline to Persian Gulf as Hormuz closure reroutes traffic
By Sarah El Sirgany and Nic Robertson
Jeddah, Saudi Arabia (CNN) — Saudi Arabia’s Red Sea port of Jeddah is bracing for an increase in business over the next two weeks.
On a breezy Sunday afternoon, the five ships on its platforms were fewer than its usual traffic, but with the near-closure of the Strait of Hormuz and the airspaces of countries along the Persian Gulf, the kingdom’s west coast ports are providing a safer lifeline to and from the region.
About a three-hour drive north of Jeddah, a 700-mile-long gas pipeline has been repurposed to export Saudi oil to tankers lined up at another Red Sea port, Yanbu. These oil cargoes represent much of a one-third hike in Red Sea traffic in the weeks since the war began, according to Saudi officials.
Yet, securing the passage of incoming supplies is equally important to a region that imports about 85% of its food.
US and Israeli attacks on Iran and Iranian retaliatory strikes have halted traffic in and toward ports along the Persian Gulf, choking these essential import and export supply chains.
Gulf-bound ships diverted
When the war began, over 60 ships en route to ports in the gulf had to divert, some back to their home bases in China and India, according to MarineTraffic data shared with CNN. Others headed to ports on the Arabian Peninsula along the Arabian and Red seas, while others chose regional ports farther afield.
The Omani ports of Sohar and Salala, the Emirati port of Khor Fakkan and Saudi Arabia’s Jeddah emerged as the alternatives of necessity delivering shipments directly to the Arabian Peninsula.
“There is no industry standard for this crisis. Your cargo’s arrival date now depends entirely on which carrier’s strategy you’re tied to,” wrote Ronan Boudet, head of container intelligence at Kpler, which specializes in global trade analytics.
With the war in its fourth week, the focus is shifting towards finding solutions to fill supermarket and pharmacy shelves across the region.
“The region is extremely import-driven, which means that from all the containers that are coming into the region, every single commodity that you could think of would be within those containers,” said Charles van der Steene, regional managing director of shipping giant Maersk.
He said shipping companies are working with local governments to set priorities.
Priorities for daily life
“Food and medicine are the priority … Whether it is for the UAE, whether it’s for Saudi, whether it’s for Bahrain or Kuwait, and any other country within the gulf, these are the prime priority to make sure that the population can receive what they need as part of their daily life,” he explained.
Identifying the right port and overland route is a key factor in ensuring that the entire length of the supply chain is efficient and available after the container has been unloaded from the vessel, van der Steene said.
As the only country that shares borders with all its Arab neighbors on the Persian Gulf, Saudi Arabia launched the “Logistics Routes Initiative” to facilitate such transfers to these countries through the easing of customs regulations and a network of roads and trucks. Saudi officials say they recorded over 94,000 outbound trucks to all land borders between February 28 and March 18.
While this network facilitates inland transfers from different ports, there is a growing emphasis on Jeddah as a main entry point. Officials at the port, the biggest in Saudi Arabia, told CNN during a visit Sunday that an increase in demand will be reflected in a 50% surge in arrivals in two weeks.
Security, however, is an ongoing vulnerability. Iranian drones have struck fuel depots and oil facilities near these key ports, which were initially considered outside the danger zone. After Israel struck a processing site linked to Iran’s South Pars natural gas field last week, Iran responded by hitting Arab energy facilities, including the Samref refinery, which is part of the Saudi port at Yanbu.
Confidence in the security of the Red Sea route was rebounding in recent months after Yemen’s Houthi rebels, an Iranian proxy, stopped their attacks on commercial vessels and US Navy ships in the Red Sea and its southern entry point, the Bab al-Mandab Strait.
Fears of a wider conflict
“Our hands are on the trigger,” Yemeni rebel leader Abdel Malek al-Houthi said in a March 5 speech, but his group has yet to launch any attacks directly on shipping.
Still, the prospect of Houthi attacks weighs on some shipping companies such as Maersk, which are currently avoiding the Bab al-Mandab Strait by either delivering to Oman’s Salalah on the Arabian Sea or entering the Red Sea only from its northern entry point, the Suez Canal.
“At this stage, of course, the primary risk that one could see is that the actual conflict itself spreads to a wider geography,” van der Steene said. While Jeddah “continues to be a safe option,” he cautioned, “we need to consider what the alternatives would be” if that changes.
For now, marine monitoring websites show a flow of tankers and cargo vessels passing through Bab al-Mandab and the Suez Canal. It’s unclear how this would change over the next weeks.
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