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European Oil Markets
31JUL

June's calm was borrowed, not banked

2 min read
09:33UTC

Wood Mackenzie data published 24 July showed Saudi Red Sea crude bypass fell 41% from a March peak by June, a de-escalation the 23 July blockade wiped out within a week.

EconomicDeveloping
Key takeaway

June's easing in Saudi Red Sea bypass reversed in a week, so freight must price a snapback, not a trend.

Wood Mackenzie data published on 24 July shows Saudi Red Sea crude bypass peaked at 4.07 million barrels a day in March and fell 41% to 2.39 million by June 1. Bypass here means Saudi crude routed away from the Red Sea approach to avoid the Houthi threat, so a falling number reads as de-escalation and returning confidence in the corridor.

The timing undercut the reading. Wood Mackenzie is an energy research firm whose flow data desks treat as a considered read on trend, yet the series it released describes a market that had already reversed. The Bab el-Mandeb blockade of 23 July snapped the bypass back toward full within a week, so a desk taking the 24 July print at face value would have inferred a cooling trend one day after the flow turned.

Read the two series together and June's normalisation shows its condition: it held only while the strait stayed open. The March-to-June decline unwound inside a week, which means a Red Sea freight position cannot be sized as though the calm were a fading trend. It has to carry a snapback premium for any single security shock, because the last one erased four months of easing in seven days.

Deep Analysis

In plain English

A research firm called Wood Mackenzie tracks how much Saudi oil avoids the Red Sea by using satellite data on ship movements, but building that picture takes several weeks. Its report published on 24 July said Saudi oil avoiding the Red Sea had fallen 41% by June, suggesting tensions were easing. But a new blockade declared the day before, on 23 July, had already reversed that trend. So the report described a calm that was already over by the time readers saw it, a reminder that even good data can lag fast-moving events.

Deep Analysis
Root Causes

Vessel-tracking analytics firms validate AIS position data against port-call records and cargo manifests before publishing route-flow estimates, a process that takes weeks rather than days; this lag is structural to how the data is compiled, not a one-off delay specific to this release.

During a period of rapid re-routing, that lag means the most-cited market benchmark for Red Sea bypass volume is systematically describing conditions that have already changed, leaving desks without a real-time equivalent until the next monthly cycle.

What could happen next?
  • Risk

    Analysts trading on the most recent published route-flow data risk anchoring to conditions that have already reversed by several weeks.

First Reported In

Update #20 · Saudi crude reroutes to Suez, freight bites

World Pipelines (citing Wood Mackenzie)· 27 Jul 2026
Read original
Causes and effects
This Event
June's calm was borrowed, not banked
A desk reading only the 24 July release would infer a cooling trend, yet the flow snapped back to full bypass the day after the data went out, so any Red Sea freight position has to price a one-week reversal.
Different Perspectives
Sanctions compliance officer reviewing a Lukoil International GmbH bid
Sanctions compliance officer reviewing a Lukoil International GmbH bid
OFAC's amended FAQ 1224 gives a compliance desk its first published standard: full severance from Lukoil and a US-jurisdiction blocked account for sale proceeds. The conditions name neither ISAB nor Italy, so a Priolo Gargallo-linked bid answers a different question than a Neftochim Burgas or Petrotel Ploiesti one.
Managed-money funds on Brent Last Day
Managed-money funds on Brent Last Day
CFTC data for the week to 21 July showed managed money flipping 74,400 contracts to a net long of 15,665 against 1,410 short on the Brent Last Day contract, code 06765T. A fund that held that short through July has now covered it, and the spent short base raises the bar for the next leg higher.
Saudi crude exporters
Saudi crude exporters
Saudi-linked tanker transits through Bab el-Mandeb fell to about 7.5 a day after the 24 July underwriting withdrawal, pushing more barrels onto the longer route round the Cape or through the Yanbu terminal. Every diverted barrel ties up a ship for longer, and a fleet that turns slower charges more.
Tanker owners on the Bab el-Mandeb route
Tanker owners on the Bab el-Mandeb route
Lloyd's-market syndicates withdrew war-risk cover from Saudi-linked hulls on 24 July, leaving owners of that class of vessel to sail Bab el-Mandeb uninsured or not at all. Tanker transits on the route fell to roughly 7.5 a day, and cover, once withdrawn, does not return on a shipowner's timetable.
Eni
Eni
Eni's board approved second-quarter results on 29 July, swinging refining EBIT to a EUR0.08bn profit from a year-earlier loss even as group profit doubled, and named Red Sea freight cost as a cap on that improvement. A refiner absorbing higher shipping costs on Saudi-linked crude while its numbers improve treats the freight line as a drag, not a crisis.
Asian buyers (India, Japan, China, South Korea)
Asian buyers (India, Japan, China, South Korea)
Asian refiners are absorbing 62% of Yanbu's 3.75m b/d flow, the bulk of Saudi Arabia's rerouted crude now clearing east rather than into the Atlantic basin. That destination split leaves Asian buyers more exposed to any single Yanbu-specific disruption than under the kingdom's normal multi-terminal export pattern.