SerpApi.Org
Oil has surged past $100 a barrel for the first time in two months after the Iran-backed Houthi militia claimed it struck two Saudi oil tankers on Wednesday night.
Brent crude oil prices climbed more than 6pc on Thursday as the strikes threatened to open a new front in the Iran war near a critical trade artery in the Red Sea.
The Yemeni group said it targeted the Encelia and Layla tankers, claiming they had violated its maritime embargo against Saudi vessels in the Bab El-Mandeb Strait.
The waterway – which is a chokepoint between the Red Sea and the Indian Ocean – has become a vital alternative shipping route to the perilous Strait of Hormuz.
Saudi Arabia has diverted around 4.7 million barrels of oil exports per day from the Strait of Hormuz to the Red Sea via its Yanbu pipeline, with ships then taking that oil through either the Suez Canal or the Bab El-Mandeb Strait.
John Evans, an analyst at PVM Oil Associates, said: “Such an amount represents 75pc of the total crude and condensate exports of 5.29 million barrels per day and therefore the current importance of Yanbu and its role in circumventing Hormuz cannot be overstated.”
Jim Reid, an analyst at Deutsche Bank, said the Houthi strikes were “raising fears that the conflict is widening”.
Saudi Arabia’s public transport authority confirmed the Encelia had been hit while sailing in the Red Sea, causing a fire in the bow of the ship, and that the crew was unharmed.
United Kingdom Maritime Trade Operations (UKMTO) said a tanker had been struck by a projectile 70 nautical miles off the coast of Al Shuqaiq, Saudi Arabia, located just north of Bab El-Mandeb. There have been no reliable reports of an attack on a second vessel.
Approximately 15 per cent of maritime trade moves through the Red Sea, which is enclosed by two narrow waterways – Bab El-Mandeb and the Suez Canal.
Since the beginning of the war with Iran, Saudi Arabia has grown increasingly dependent on Bab El-Mandeb, using the channel as a workaround to maintain the flow of its oil exports.
However, after months of largely staying out of the conflict, the Houthis have threatened to paralyse the waterway in a similar fashion to Tehran’s grip on the Strait of Hormuz.
The attack on Saudi ships was the first since militants announced the closure of the trade artery on Monday in retaliation for a Saudi blockade of ports and airports in Houthi-controlled areas of north-western Yemen.
In a statement on Telegram, the proxy rebels said they had carried out a “specialised military operation” with drones and ballistic and cruise missiles that had caused “major fires” on two vessels.
The renewed fighting came a week after Saudi Arabia bombed Sana’a airport in the Houthi-controlled Yemeni capital, reportedly with the approval of Donald Trump.
That incident ended a four-year truce between the Tehran-backed militia and Riyadh after a decade-long civil war that killed approximately 377,000 people, according to United Nations estimates.
Since 2022, the informal but mostly stable ceasefire has seen the Houthis retain control of Sana’a and a swathe of territory in north-western Yemen.
However, tensions flared again on July 3 when an Iranian aircraft defied warnings from Saudi warplanes and landed at the Houthi-controlled airport, purportedly to fly a delegation to Tehran for the funeral of Ali Khamenei.
Since then, the Iran-backed rebels have been preparing to close Bab El-Mandeb as part of Tehran’s endeavour to gain greater leverage over the global economy and exert pressure on Mr Trump.
In the two days since the Houthis claimed to have closed Bab El-Mandeb, traffic through the trade corridor has declined sharply. On July 21, just 29 vessels passed through the strait, down 34 per cent, according to data from Kpler, which tracks shipping.
Although the conflict in the area has not yet created an oil supply crunch, a rise in vessel about-turns in the nearby Gulf of Aden suggests companies have taken the Houthi threats against Saudi-linked ships seriously, which threatens to further disrupt exports of crude oil.
The escalating crisis in the Middle East has pushed oil prices to a six-week high. Brent crude futures rose 2 per cent to $96 per barrel in early trading on Thursday in Asia.
The attacks on tankers came on the same day the Trump administration signed a deal to create a civilian nuclear programme in Saudi Arabia that opened the door to enrichment of uranium.
On Wednesday, the US also carried out strikes against Iranian targets for the 12th consecutive night to address threats to shipping in the Strait of Hormuz, US Central Command said.
