International and U.S. benchmark oil surged by over four percent on Wednesday amid renewed fears of supply disruptions, as Iran’s terrorist proxies in Yemen began implementing their “maritime ban” against Saudi Arabian oil tankers in the Red Sea, turning several ships away with threats of force.
The Houthis, an Islamist insurgency backed by Iran that has been waging a civil war in Yemen since 2014, announced a “ban” against Saudi ships on Monday.
The Saudis intervened against the Houthis in the Yemeni civil war from 2015 to 2022. An uneasy and informal ceasefire was observed until this month, when the Houthis began attempting to conquer territory in Yemen again, and the Saudis bombed the airport in the occupied capital city of Sanaa.
Houthi supporters hold a rally in Sanaa, Yemen, Friday, July 17, 2026, against the Saudi-led coalition. Banner in Arabic reads, “All Saudi oil facilities are targets to our missiles and drones.” (AP Photo/Osamah Abdulrahman)
The Houthis accused the Saudis of mounting a “siege” or “blockade” against them and said they would retaliate by preventing Saudi Arabia from shipping its oil through the Red Sea and Bab el-Mandeb Strait – a route that became more important for the Saudis after Iran shut down the Strait of Hormuz with terrorist attacks.
The Houthis demonstrated their ability to terrorize Red Sea shipping during the Gaza War from 2023-2024, so their threat against Saudi oil tankers was credible. Shipping analysts reported on Tuesday that several Saudi ships turned around in the Red Sea and abandoned their efforts to sail past Yemen, depriving customers in China and India of millions of barrels of oil.
The National cited data from maritime intelligence firms that showed five ships carrying Saudi cargoes reversed course, including a freighter called Xin Long Yang that was loaded with two million barrels of Saudi crude and headed for China.
Two more ships reversed course later on Tuesday, including a Chinese vehicle carrier called Liu Jiang Kou that was headed for the Saudi port of Jeddah, bringing the total up to seven.
However, Windward maritime intelligence reported that at least three Saudi tankers have approached or crossed the Bab el-Mandeb Strait since the Houthis announced their blockade. The Houthis do not appear to have attacked any ships yet – their threats are being delivered via email to ship owners via their ironically named “Humanitarian Operations Coordination Center.”
“This route was essential for continued supply of food, energy and all other goods and commodities in Saudi Arabia and the rest of the Gulf Co-operation Council. Threats to Saudi crude oil exports could easily push crude oil prices over the $100 per barrel levels,” warned Kamco Invest head of investment strategy Junaid Ansari.
Bimco chief shipping analyst Niels Rasmussen noted that Saudi exports through the Red Sea grew from 1.6 million barrels per day (bpd) to 4.7 million after the Iran conflict began, a sign of how much the Saudi oil industry had come to depend on the alternate route after the Strait of Hormuz became too risky.
The final alternative route remaining to the Saudis would be through the Suez Canal into the Mediterranean, which Rasmussen noted would “at least double the sailing distance to all ports in Asia and could increase global tonne miles by at least 5 per cent and 10 per cent.”
The global benchmark oil, Brent crude, shot up 4.12 percent on Wednesday to hit $94.76 per barrel, while the U.S. benchmark, West Texas Intermediate, rose 4.35 percent to $88.01 per barrel, due to the new Red Sea tensions on top of the Strait of Hormuz crisis.
Goldman Sachs predicted that Brent crude could hit $120 per barrel by the end of the year, if shipping tensions persist, although analysts felt it was more likely that some form of de-escalation would occur, and oil would sink below $80 per barrel instead.
The Saudi Foreign Ministry on Monday condemned the Houthi blockade and said it would take “all necessary measures” to protect its civilian vessels, while the Houthis warned any “foolish” Saudi action would meet a “comprehensive and decisive response.”
“We call upon the people of our great nation to continue the general mobilisation and general call to arms, and to be fully prepared for all scenarios and developments and to support the fronts with fighters,” the terrorist group said to Yemenis living in its conquered territory.
President Donald Trump said on Wednesday that Iran’s attempt to close the Strait of Hormuz will be ended by military force, and he has hinted at taking a similar tack with the Houthis if necessary.
“From this point forward, any time the Islamic Republic of Iran shoots at a ship in the Strait of Hormuz, whether it be by Missile, Rocket, Drone, or any other device or weapon, the United States will bomb and destroy ONE BRIDGE OR POWER PLANT, including those located next to, or in, the Capital City of Tehran,” Trump wrote on Truth Social.