Houthis Close Saudi Arabia's Red Sea Oil Corridor at Bab el-Mandeb
The Houthi blockade on Saudi crude tankers at Bab el-Mandeb cuts off the kingdom's main contingency if the Strait of Hormuz closes.
ICE Brent crude front-month traded at $89.79 a barrel as of August 12 (2026-08-12), roughly $10 below the intraday peak it reached on July 23 (2026-07-23), when Yemen's Houthi rebels claimed strikes on two Saudi oil tankers and Brent futures jumped more than 6% to hit $100 — their highest in nearly two months — within a single session, RTE reported. The price has since pulled back. The underlying route problem has not.6
At least one Saudi crude tanker transited the Bab el-Mandeb Strait during the week of July 20 (2026-07-20) with its transponder switched off, OilPrice.com reported, after the Houthis announced an embargo on Saudi oil shipments through the waterway. Ships were turning away from the southern Red Sea. On Tuesday (2026-07-21), a Greek-owned Suezmax named the Amazon, which had departed Yanbu carrying more than 1 million barrels of crude, switched its stated destination to the Suez Canal rather than continuing south through the strait, Rigzone reported.7,4
The volumes at risk make the blockade consequential beyond symbolism. Tanker tracking data showed 5.9 million barrels a day departing from the two Yanbu terminals in the week ending July 17 (2026-07-17), record export levels from Saudi Arabia's Red Sea coast, shipped out in the days before the Houthi announcement made that route dangerous, Rigzone reported.4
For decades, the East-West Pipeline and the Yanbu terminals were Saudi Arabia's standard answer to any Hormuz threat. If Persian Gulf volumes were squeezed, crude moved west by pipe and left through the Red Sea. Markets treated this as a reliable fallback. The Bab el-Mandeb, 18 miles wide and flanked by Yemen's Houthi-controlled coastline, is where that fallback now fails. With the rebels targeting Saudi tankers at the strait's southern end, both of the kingdom's main export corridors face simultaneous pressure.8,2
A MarineTraffic analyst said on Wednesday (2026-07-22) that the "Bab el-Mandeb risk picture is deteriorating." The Suez Canal, which sits at the northern end of the Red Sea, had been rebuilding traffic after years of disruption. Egyptian state statistics agency CAPMAS data show 529 oil tankers transited in April 2026, 28% more than in April 2025, as earlier Hormuz disruptions pushed shippers toward the Red Sea route. Canal revenue reached $419 million that month, 27% above the year-earlier figure and the highest monthly reading since early 2024.5,1
But the recovery was fragile. Authorities estimate the prior wave of Houthi attacks cost the canal at least $9 billion in lost revenue. A renewed campaign targeting Saudi shipments specifically, rather than Israeli-linked vessels as in earlier rounds, threatens both the tanker traffic and the fee income Egypt had just started to recover.1
The Houthi action fits a broader escalation. On Tuesday (2026-07-14), U.S. Central Command restarted its blockade of all Iranian shipping and ports, ending what remained of the ceasefire with Tehran, Foreign Policy reported. The Houthi embargo announcement followed eight days later. The rebels receive Iranian support, and the decision to authorize a Saudi-specific oil embargo reflects how thoroughly the U.S.-Iran diplomatic track had collapsed by mid-July.3
Goldman Sachs, in reports following the July 23 (2026-07-23) price spike, expected oil prices to hold most of their gains through July and August, supported by declining global inventories and seasonal demand. Dubai crude front-month sits at $84.06 as of August 12 (2026-08-12), and contrarian signals in that market — pointing to storage builds — suggest upside may be capped even as supply routes tighten.6
Houthis have varied the scope of past blockades; announced restrictions have not always translated into systematic interdiction. Vessels running dark and shippers rerouting north through Suez suggest markets are pricing the risk rather than waiting to test enforcement. Saudi Arabia's options narrow to paying elevated marine war-risk premiums to push crude south through Bab el-Mandeb, redirecting volumes on far longer Cape of Good Hope voyages, or accumulating production that cannot easily move west. None of those options recreates what Yanbu was built to provide.7,4,8