Pomegra
Houthi missile and drone strikes on two Saudi crude carriers in the Red Sea on Wednesday push Brent crude toward $100 a barrel, threatening a global energy supply chain already strained by the closure of the Strait of Hormuz.
- Brent crude surged 5.6% to $99.17 a barrel on July 23, its highest level since May, after Houthis struck Saudi tankers Encelia and Layla.
- The Houthi naval blockade of Saudi Arabia, declared July 20, closes a second critical oil chokepoint as the Strait of Hormuz remains shut since February.
- A full Bab el-Mandeb closure would strand roughly 7% of global oil supply, compounding energy shortfalls for China, India, and other major importers.
Lead
Yemen's Houthi forces struck two Saudi Arabian crude oil tankers in the Red Sea on Wednesday, the first confirmed attacks since the Iran-backed group declared a maritime embargo against the kingdom three days earlier. Brent crude futures surged 5.6% to $99.17 a barrel on Thursday — the highest settlement since May 22 — while West Texas Intermediate advanced 6.4% to $92.37 a barrel, as energy traders reassessed supply risk across the most consequential shipping corridor remaining open for Saudi Arabia's oil exports.
What Happened
Houthi military spokesperson Yahya Saree announced that the group targeted tankers Encelia and Layla with ballistic and cruise missiles and drones, citing violations of the blockade imposed on Saudi ports and shipping. The Encelia sustained a fire at its bow while transiting near the Saudi port of Jizan; all crew members were reported safe. The Layla attack was not immediately independently confirmed.
The strikes follow the Houthi declaration on July 20 of a full maritime embargo against Saudi Arabia, framed by the group as retaliation for Saudi coalition airstrikes on Sanaa's international airport. In the days between the declaration and Wednesday's attacks, at least five Saudi crude tankers made U-turns in the Red Sea, diverting from routes toward the Suez Canal and downstream Asian markets.
Market Reaction
Oil price today reflects a market pricing in structural supply risk rather than a temporary event premium. Brent has risen more than 30% in July alone, as the simultaneous closure of the Strait of Hormuz — effectively shut since U.S. and Israeli strikes on Iran began in late February — and the new Houthi naval blockade now threaten both of Saudi Arabia's primary maritime export corridors. WTI crude opened Thursday at $86.50 and climbed to $92.37 before the session close, a gain that extends a weeks-long trend driven by shrinking global crude availability. Energy equities, shipping insurers, and tanker operators tracked the commodity move higher throughout the session.Strategic Context
The global energy supply equation shifted materially earlier this year when Saudi Arabia redirected the majority of its crude exports from the Persian Gulf through the East-West Pipeline to the Red Sea terminal at Yanbu after the Hormuz closure. Yanbu throughput climbed above 2.2 million barrels per day in the first weeks of that transition, with the kingdom targeting a record 3.8 million barrels per day through the port.
That reroute now faces its own blockade. Roughly 75% of Saudi crude flows to Asian buyers — principally China, India, Japan, and South Korea — all of whom must receive shipments through the Bab el-Mandeb Strait, the 18-mile-wide passage between Yemen and Djibouti that controls access to the southern Red Sea. A sustained or complete Red Sea naval blockade would force those cargoes onto the far longer Cape of Good Hope route, adding weeks of transit time and sharply higher freight costs to every barrel.
Market estimates indicate that a full closure of the strait would remove approximately 7% of global oil supply from accessible markets, compounding what energy agencies already characterize as the tightest supply environment in more than a decade following the Hormuz shutdown.
Geopolitical Dimension
The Houthi Saudi tanker attack occurs within a broader military context that has grown significantly more complex since the U.S.-Iran conflict escalated in late February 2026. U.S. forces were reported conducting strikes on Iran for a twelfth consecutive night on Wednesday. President Donald Trump stated that Washington holds Iran directly responsible for Houthi actions, an assertion that raises the prospect of further U.S. military engagement targeting Houthi infrastructure in Yemen.
Saudi Arabia condemned the blockade declaration, with the coalition pledging protection measures for vessels transiting Bab el-Mandeb. The practical effectiveness of those measures is under scrutiny following Wednesday's strikes, which the Houthis carried out despite coalition warnings.
The group's ability to enforce a maritime embargo — evidenced by tanker U-turns even before the strikes — demonstrates that the threat is being treated as credible by commercial shipping operators, regardless of the eventual military outcome.
What Comes Next
Shipping insurers are expected to revise war-risk premiums for Red Sea transits upward in the coming days, making the Cape routing economically preferable for an increasing share of operators. Energy traders and importers in China and India face supply disruptions that will likely take weeks to fully emerge in available inventory data, given the distances involved.
The critical variable is whether the U.S. or allied naval forces move to actively escort or protect Saudi commercial traffic through Bab el-Mandeb, and whether Houthi forces escalate beyond the two tankers struck Wednesday. A second wave of confirmed attacks would accelerate tanker rerouting and add another leg to the ongoing oil price rally.
