Houthi Naval Blockade Sends Saudi Oil Tankers off Course

Yemeni Houthi rebels have declared a naval blockade of Saudi Arabia and warned shipping companies against loading or unloading cargo at Saudi ports, threatening to attack vessels that do so.

The announcement triggered an immediate market reaction. Two supertankers, Xin Long Yang and Rodos, carrying millions of barrels of Saudi crude bound for China and India, turned around near the Bab el-Mandeb Strait on Tuesday and headed toward the Suez Canal. A third tanker, New Prime, also altered course while still off the coast of Oman.

The move marks the second major disruption to global shipping routes in a short period. Saudi Arabia's Red Sea port of Yanbu had become a key alternative export hub for Middle Eastern oil after shipping through the Strait of Hormuz was disrupted.

The escalation immediately drove up war risk insurance premiums for vessels calling at Saudi ports. Maritime security firms and analysts, including Ambrey, have designated Red Sea transit for such ships as high risk.

Although Yanbu remains operational and continues loading tankers, rerouting cargoes to Asian customers via the Suez Canal and around the Cape of Good Hope would add weeks to delivery times. Analysts warn that if the Houthis significantly restrict traffic through the Bab el-Mandeb Strait, oil exports from Yanbu may increasingly be redirected to European rather than Asian markets.

(Reuters, Max)