Houthi warning on Saudi ports could have carriers rethinking Red Sea

The Houthis have warned shipping companies not to load or discharge cargo at Saudi Arabian ports or risk being targeted for an attack "in any location."

In the wake of the message, two oil tankers and a vehicle carrier reversed course in the Red Sea on Tuesday. No commercial vessel has been reported to be targeted under the new measures so far.

The threat expanded on the Yemeni militant group's call Monday to close off the Bab el-Mandeb Strait to Saudi ships, heightening the risk for vessels passing through the channel. Sitting between Yemen and Djibouti, the Bab el-Mandeb is the southern chokepoint to the Red Sea where the Houthis launched many of their attacks on shipping from late 2023 through 2025.

The turnarounds for both ships signal another potential spike in oil prices as movement of potential supply gets limited. While more than 20 percent of the world's oil supply flows through the now-restricted Strait of Hormuz under normal circumstances, another roughly 7 percent transits the Bab el-Mandeb Strait, according to commodity market intelligence firm Kpler.

Shipbroker Clarksons said in a note on Tuesday that an actual blockade seems unlikely given the resources required for such an undertaking, but noted that a "step-up in hostilities could see Houthis targeting Saudi-associated ships" transiting the strait.

Most containers in and out Saudi Arabia flow through Jeddah Islamic Port, which lies on the Red Sea and is the second-busiest port in the region after the U.A.E.'s Port of Jebel Ali.

"Container carriers are also diverting some Gulf traffic through Jeddah, though most major carriers get there via the Mediterranean and northern Red Sea, still avoiding the Houthi chokepoint," said Judah Levine, head of research at Freightos, in a Tuesday update. "So the new closure would likely be a bigger blow to energy flows than to the container market, but could see carriers like CMA CGM and Maersk backtrack on recent steps back toward Red Sea transits, as well as disrupt regional carriers who were still passing through the Bab el-Mandeb for Saudi calls."

Lars Jensen, container shipping expert and CEO of consultancy Vespucci Maritime, observed Tuesday morning that CMA CGM had indicated it cut multiple stops to Jeddah on its MEDEX and BEX2 services. Those Asia-Europe services use the Suez Canal route.

The Port of Jeddah had previously benefited from oil and cargo volumes being routed away from the Strait of Hormuz. In June, Jeddah saw exports increase 60 percent versus levels calculated in early February, while imports accelerated 117 percent, according to data from container tracking company Vizion. Conversely, Saudi Arabia's Port of Dammam, which lies on the Persian Gulf, saw its business collapse in the period due to the lack of traffic, with imports plummeting 92 percent and exports sinking 98 percent.

Cargo leaving Saudi Arabia and the wider Middle East has already declined substantially since the start of the war in Iran, particularly to the U.S. In May, total U.S. imports departing from Hormuz-affected ports fell 93.2 percent from the year prior in May to 100,591 metric tons, according to data from Descartes.

According to the Houthi email, which was sent by the group's Sanaa-based Humanitarian Operations Coordination Center, any attempts to stop at the ports "would expose the violating vessels to sanctions. Furthermore, they may be subject to targeting in any location within the operational reach of the Yemeni Armed Forces."

A Chinese oil tanker, the VLCC Xin Long Yang, which completed the loading of 2 million barrels of Saudi crude oil at the country's Yanbu port, was originally heading to exit the Red Sea to go to China, but made a U-turn and headed in the Suez direction instead.

The smaller tanker, Rodos, which had loaded about 700,000 barrels of Saudi crude for ‌India, also ⁠turned around.

A third vessel, Cosco Shipping's roll-on/roll-off vehicle carrier Liu Jiang Kou, was sailing through the Gulf of Aden towards the Red Sea when it reversed course near Djibouti.

“Vessels are banned from loading or discharging cargo at or from any Saudi ports,” Monday's email read, which was received by multiple shipping companies, according to Reuters. “We strongly recommend that your company exercise due diligence and the utmost care in all its dealings."

The UN shared its concerns about Houthi threats to impose the maritime embargo, which could potentially trigger a fresh surge in crude oil prices, disrupt fuel supplies and have further ramifications on the global economy.

“It's obviously another chokepoint," said UN spokesman Stephane Dujarric on Monday. "We're already seeing the impact of the near-closure of the Strait of Hormuz and what impact that is having on the global economy."