As oil soars, experts watch Red Sea tankers for clarity on Houthi blockade
With oil prices hitting $100 a barrel on Thursday, analysts are monitoring which vessels Yemen’s Houthis allow through the Red Sea, indicating that the blockade shapes who moves Saudi crude, not whether it moves.
Oil prices surged past $100 a barrel on Thursday, with Brent futures rising 6.96% to $100.65, the first time since late May. Experts say the Houthi blockade in the Bab el-Mandeb strait is currently determining who transports Saudi crude rather than whether it is transported at all.
The Iran-aligned Houthis announced a naval blockade on Monday targeting shipments from Saudi Arabia and threatening tankers linked to Saudi Arabia, Israel, and the United States. On Thursday, the Houthis attacked two Saudi oil tankers, setting one ablaze, according to a Saudi news agency. The status of the second vessel remains unclear, said maritime analysis firm Windward.
Windward’s Michelle Bockmann noted the Houthis are unpredictable and the blockade’s implications are not fully clear. “We’re watching now the ability of Chinese-owned tankers at [Saudi port] Yanbu if they are allowed to go through Bab el-Mandeb. Two have gone through but those had been loaded before the blockade was announced.”
Windward tracking showed a cargo that passed through the strait on July 20 was Saudi in origin but Chinese in crew and destination, and it faced no interdiction. The enforcement is calibrated by affiliation rather than cargo, Windward said – the blockade shapes who moves Saudi crude, not whether it moves.
The standoff adds to pressure from the Strait of Hormuz closure, which Iran enacted after US and Israeli attacks. Diesel prices are also impacted, with US average at $5.34 per gallon. Patrick De Haan of GasBuddy said Ukrainian drone strikes have taken some Russian refineries offline, leading Russia to ban diesel exports.
China, historically a major importer, has slashed its oil imports in recent months, helping stabilize prices. “It’s been one of the reasons that oil prices haven’t gone up dramatically – that China slashed its imports, and no one predicted that,” De Haan said. He added that the upcoming US hurricane season presents another wildcard for global refining capacity and prices.
