Houthis Declare Naval Blockade of Saudi Arabia and Say They Struck Two Oil Tankers Near Bab el-Mandeb

Saudi crude loadings through the strait fell about 34 percent in two weeks and Brent crude rose above $95, as a second chokepoint comes under threat with the Strait of Hormuz already contested.

Yemen's Houthi movement declared a maritime blockade of Saudi Arabia at the Bab el-Mandeb strait on July 20 and, two days later, its military spokesman Yahya Saree said the group had struck two Saudi oil tankers, the Encela and the Laylia, with ballistic and cruise missiles and drones, causing fires aboard both vessels. The group, which controls northern Yemen and is aligned with Iran, described the campaign as retaliation for a Saudi airstrike on the airport in Sanaa, the capital it holds, and for a blockade of Yemen it says Riyadh has maintained for more than a decade. The United Kingdom Maritime Trade Operations centre confirmed that a tanker had been hit by a projectile that started a fire the crew was fighting.

Saudi Arabia rejected the embargo. A Saudi-led coalition spokesman called claims of a Saudi siege of Yemen's ports and airports "disinformation" and warned of wider escalation in the Red Sea. Enforcement so far is partial, but the disruption is measurable. Several tankers carrying Saudi crude reversed course toward the Suez Canal, and the analytics firm Kpler recorded Saudi loadings through the strait falling from 29.58 million barrels in the week of June 29 to 19.50 million in the week of July 13, a drop of about 34 percent.

The declaration opens a second front on the world's oil map. The Strait of Hormuz has been contested since the war between the United States, Israel and Iran began earlier this year, and Saudi Arabia had relied on its East-West "Petroline" pipeline and the Red Sea route as a way around Hormuz. With both chokepoints now exposed, Kpler estimates that a prolonged disruption of both could affect roughly a quarter of global seaborne oil and gas.

Markets are pricing meaningful but not yet total disruption. Brent crude rose more than 4 percent to about $95 a barrel, a seven-week high, and gold traded above $4,100 an ounce as investors sought protection, even as the same oil increase revives inflation concerns that can weigh on bullion.

What this means

The mechanism is a squeeze on Saudi export logistics from two directions at once: with Hormuz contested and Bab el-Mandeb now threatened, Riyadh loses the fallback routes that let it keep barrels flowing, tightening physical supply to Asian buyers such as China, India and South Korea. Exposed parties include crude importers facing higher landed costs, tanker owners and cargo insurers charging war-risk premiums for the Red Sea, and airlines and manufacturers whose fuel and input costs rise. Central banks weighing rate cuts face a fresh inflation impulse through energy prices.

What to watch

Whether the Houthis attack more Saudi-flagged or Saudi-cargo vessels, and whether strikes extend to non-Saudi shipping transiting Bab el-Mandeb.
Red Sea war-risk insurance premiums and the volume of Saudi crude rerouted to the Suez Canal or held at storage.
Any Saudi or US naval response in the southern Red Sea, and whether Riyadh formally confirms damage to the two named tankers.
Brent's move toward or past $100 and the spread between physical cargo prices and futures as a gauge of real scarcity.

Houthis Declare Naval Blockade of Saudi Arabia and Say They Struck Two Oil Tankers Near Bab el-Mandeb

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