Publications List
The Impact of Geopolitical Developments on Supply Chains and Logistics in Saudi Arabia
- Gulf Research Center
Geopolitical developments in the Arabian Gulf and Red Sea regions since late February 2026 have significantly reshaped trade routes and supply chains connected to the Kingdom of Saudi Arabia. The crisis has evolved from a severe disruption in the Strait of Hormuz into a more complex operating environment, marked by renewed security risks in the Bab elMandeb Strait and the Red Sea. Consequently, the challenge is no longer confined to the disruption of a single maritime corridor but extends across the network of shipping routes connecting the Kingdom to global markets. Nevertheless, these developments have demonstrated Saudi Arabia’s ability to leverage its strategic location between the Arabian Gulf and the Red Sea, together with its network of ports and overland transport corridors, to redirect a substantial share of trade flows.
Geopolitical developments in the Arabian Gulf and Red Sea regions since late February 2026 have significantly reshaped trade routes and supply chains connected to the Kingdom of Saudi Arabia. The crisis has evolved from a severe disruption in the Strait of Hormuz into a more complex operating environment, marked by renewed security risks in the Bab elMandeb Strait and the Red Sea. Consequently, the challenge is no longer confined to the disruption of a single maritime corridor but extends across the network of shipping routes connecting the Kingdom to global markets. Nevertheless, these developments have demonstrated Saudi Arabia’s ability to leverage its strategic location between the Arabian Gulf and the Red Sea, together with its network of ports and overland transport corridors, to redirect a substantial share of trade flows.Port performance indicators reveal a clear transition from the initial shock to a phase of adaptation, rather than a full recovery. In March 2026, total container throughput at Saudi ports declined by 33% year-on-year, while inbound container volumes fell by 41.7%. By August 2026, total container throughput had increased to 733,800 TEUs, compared with 495,800 TEUs in March 2026. Nevertheless, the number of vessels calls in August remained 26.8% below the corresponding period of the previous year, while exports and transshipment activity continued to record substantial declines. These trends indicate that the recovery in import flows outpaced the broader recovery in maritime activity.One of the most significant manifestations of this adaptation was the geographical redistribution of imports towards the Kingdom’s western coast. The value of imports handled through Jeddah Islamic Port increased from approximately SAR 16.4 billion in August 2025 to SAR 31.3 billion in August 2026, representing growth of nearly 91%. In contrast, imports through King Abdulaziz Port in Dammam declined from approximately SAR 19.2 billion to SAR 1.1 billion over the same period. As a result, the estimated share of western ports in the total value of seaborne imports increased from approximately 48% to 95%. This shift represents one of the most significant outcomes of the crisis, demonstrating the strategic value of Saudi Arabia’s dual-coast logistics network and its capacity to redirect trade flows away from critical maritime chokepoints.
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