If you think about Saudi Arabia, the geography is the country is bordered by 2 waterways – the Persian Gulf and the Red Sea. Most of the action and where people live is near the Persian Gulf. Given the war between Iran and the US, the Persian Gulf goes through the Strait of Hormuz is slowed down or stopped, but generally very few ships go through the Strait. Fortunately for Saudi Arabia, they have a pipeline going to the Red Sea and can sell oil to the rest of the world.

In an article by Alex Lawler and Dmitry Zhdannikov of Reuters, while there is alternative to the Red Sea, it is not as safe as everyone expected. At the Red Sea, Houthi fighters in Yemen have been fighting the government backed by Saudi Arabia. The fighters have taken an island that influences shipping traffic in the Red Sea. The Houthi fighters have used drones to attack the east-west Saudi pipelines.

Saudi Arabia will run out of oil stocks for exports leading up to 4% of global supply, Saudi oil buyers and traders said.

In business, having alternatives is a great and for the past 6 months, the pipeline running through the desert across the Arabian Peninsula has spared Saudi Arabia from the brunt of the impact of war which has crippled exports from its neighbors. The end of the pipeline is the port of Yanbu on the Red Sea.

At the end of the pipeline, you often you see large metal storage tanks, Yanbu storage capacity stands at 35 million barrels, with Ain Sukhna storing 18 million and Sidi Kerir storing 20 million.

According to IEA, which coordinates Western energy policies, believes world oil supply will decline by 5.7 milllion b/d or 6%.

Saudi Arabia told OPEC that its oil production had dropped to just 6.2 million b/d in August from 10.9 million b/d in February before the start of the war.

Linking to dividend paying stocks, every business spends time thinking about alternatives. The alternatives can be about supply lines or the alternatives to what the product or service is, but alternatives are extremely important for investors to know about, what are they?

There are more questions than answers, till the next time – to raising questions.