Global Chokepoint Disruption Adds $5/Barrel Premium, Libya Aims for 2M Bpd

Saudi Arabia is paying a premium of around $5 per barrel to reroute crude away from Middle Eastern chokepoints, according to an OilPrice.com report published Friday. The detour, which sends oil west across the kingdom to the Red Sea, through Egypt via the SUMED pipeline, and around Africa's Cape of Good Hope to reach Asia, adds significant cost from extra freight, fuel, insurance, and pipeline charges. For a standard two-million-barrel cargo, this approaches an additional $10 million. Saudi Aramco is reportedly considering a separate pricing mechanism for crude loaded from Egypt’s Mediterranean port of Sidi Kerir as a result.

The reroute is a direct response to threats at two critical shipping lanes. The first, the Strait of Hormuz, has seen repeated attacks, including 15 on vessels belonging to Abu Dhabi National Oil Company (ADNOC) since the regional war began, according to a separate Friday report from OilPrice.com. One crew member has been killed and 20 injured in those attacks. ADNOC said the incidents are having a “significant impact on operations” as it tries to move product through the strait, which previously carried one-fifth of global oil consumption.

The second chokepoint is the Bab el-Mandeb passage at the southern end of the Red Sea, which is threatened by Houthi attacks. Saudi Arabia's workaround uses its East-West Pipeline to Yanbu on the Red Sea, then sends tankers only through the northern Red Sea to Egypt before the long voyage around Africa. The journey to Asia can increase from about 19 days to 48 days, with tanker fuel costs rising from approximately $1.26 million to $2.87 million, according to Reuters calculations cited by OilPrice.com.

Meanwhile, Libya's National Oil Corporation (NOC) expressed confidence Friday that it could raise oil production to 2 million barrels per day by the early 2030s, up from about 1.4 million bpd now, OilPrice.com reported. NOC Chairman Masoud Suleman said a 2026 unified budget brokered with U.S. help provides a “lifeline” of more than $2 billion as an operating budget, a critical development after the company received no funding in 2025. The funding is intended to help attract investment, with international companies like Repsol, Eni, and QatarEnergy having recently signed exploration agreements.

For Bakken operators, the reports underscore a global market where geopolitical risks are materially increasing the cost of bringing oil to market from key Middle Eastern exporters, potentially providing a structural floor for global prices. The significant investment and extended timelines required for Libya to add meaningful production also highlight that new OPEC supply is not imminent, maintaining focus on non-OPEC producers like those in North Dakota for near-to-medium term output.