Saudi Oil Exports Threatened by Houthi Red Sea Blockade

Iran‑backed Houthi rebels in Yemen have declared a blockade of the Bab el‑Mandeb Strait and have attacked several tankers linked to Saudi Arabia. Recent assaults on the Saudi‑flagged Encelia and other vessels have caused damage but no casualties, and insurers in the Lloyd’s market are withdrawing war‑risk coverage for ships with any connection to Saudi ports.

Despite the blockade, shipping data show dozens of ships still transiting the narrow strait, with 43 vessels recorded crossing on a recent Thursday, up from 35 the day before. Some vessels have made U‑turns or turned off transponders to avoid targeting. The uncertainty has driven a surge in war‑risk insurance premiums and forced many operators to consider longer, costlier routes via the Suez Canal or around Africa.

The disruption has markedly increased the cost and duration of Saudi oil shipments. A voyage from Yanbu to Taiwan now takes about 48 days instead of 19, and fuel and transit fees add roughly $2.5 million per trip. The heightened risk has pushed crude oil prices above $100 per barrel. Saudi Arabia continues to rely on its east‑west pipeline to move crude to the Red Sea, but the combined pressure from the Red Sea blockade and the ongoing closure of the Strait of Hormuz threatens a key export corridor.