Houthis strike two Saudi oil tankers in Red Sea, Trump threatens 'major military punishment' on Iran, Brent crude surges past $100

A second chokepoint closes

Yemen’s Iran-aligned Houthi militia escalated their campaign against Saudi Arabia this week by declaring a naval blockade targeting Saudi vessels in the Red Sea and then striking two oil tankers. Saudi officials confirmed one ship operated by a Saudi company was hit, causing a fire. No casualties were reported. The Houthis had sent a warning email to shipping companies on Monday, July 20, ordering them to avoid loading or unloading at Saudi ports “in any location” within their reach. By Tuesday they claimed six ships had already changed course. The Thursday attacks turned the threat into reality, with fires visible on both tankers.

The Houthis got themselves involved by attacking Saudi Arabia and its ships.

Saudi oil artery under siege

The Bab el-Mandeb strait, at the southern entrance to the Red Sea, has become the kingdom’s primary conduit for crude exports since the Strait of Hormuz was largely blocked following the outbreak of the US-Iran war on February 28. Saudi Arabia now ships around 5 million barrels per day from its west coast, roughly four-fifths of which transits Bab el-Mandeb, according to analytics firm Kpler. The tanker struck on Thursday was carrying about 730,000 barrels loaded at the Yanbu terminal. With the Houthi territory less than 100 kilometres from the strait, the group can deploy naval mines, drone boats, and helicopter-borne boarding teams, officials told the Associated Press on Tuesday.

Global oil market shock

The immediate market reaction was sharp. Brent crude leapt past $100 a barrel on Thursday, gaining more than 13% in a matter of days after starting the month near $71. Analysts at Rystad Energy cautioned that failure to restore a ceasefire and a continued Houthi threat could push prices to $120. The Bab el-Mandeb ordinarily handles about 4.1 million barrels per day of crude and refined products, roughly 5% of the global total. A sustained closure would compound the supply crisis already triggered by the Hormuz disruption, which had cut off 20% of global energy flows.

If a ceasefire does not materialise and Hormuz remains largely closed while the Houthi threat to Red Sea shipping intensifies, the risk of a significant rebound in oil prices would be substantial.

US military escalation

Hours after the tanker attacks, President Donald Trump escalated the US role, deploying a B-1 long-range bomber from RAF Fairford in the UK to strike Islamic Revolutionary Guard Corps targets inside Iran. Trump posted on Truth Social that Washington would hold Tehran accountable for any further Houthi strikes and warned of “a major military punishment” to be applied to Iran and the Houthis. Secretary of State Marco Rubio said the militia had entangled themselves in the wider conflict.

If they start again, the US will hold Iran responsible and a major military punishment will be applied to Iran and, of course, the Houthis.

Rerouting and alternative pathways

Saudi Aramco moved quickly to keep supplies flowing, offering additional spot crude cargoes for loading from Egypt’s Mediterranean port of Sidi Kerir, according to five trading sources. The pivot signals a shift away from the risky Bab el-Mandeb route. Tankers unable to use the strait must now traverse the Suez Canal and then sail around Africa, adding at least four weeks to a typical journey and sharply increasing freight and insurance costs. The largest crude carriers cannot make the Suez transit fully laden; they must offload part of their cargo via a pipeline south of the canal and reload near Alexandria.