Houthi Attacks Send Saudi Oil Prices Soaring

On July 23, two Saudi oil tankers were attacked by Houthi forces in the Red Sea, sparking concerns of a potential blockade on the Bab el-Mandeb Strait. The strikes came after the Houthis announced a maritime embargo against Saudi Arabia on July 20, which has raised tensions in the region.

The attack on the oil tankers caused large fires and has led to a significant increase in Brent crude oil prices, which rose to almost $100 per barrel for the first time since May 26. The price hike is attributed to the potential closure of the Bab el-Mandeb Strait, which could halt Saudi oil exports to Asia and reduce global oil supply by 7%.

Shipping companies have been advised to avoid voyages through the Red Sea and Gulf of Aden due to the heightened risk of attacks. The Suez Canal is being used as an alternative route, but it is much longer, takes more time, and costs more, with estimated freight costs exceeding $5 million per voyage.