Red Sea Attacks on Saudi Tankers Push Brent Crude Above $90
Escalating military conflict in the Middle East is forcing tankers away from the Strait of Hormuz and into Houthi-targeted Red Sea waters, driving Brent crude above $90 a barrel and threatening global energy supply chains.
Brent crude surged past $90 a barrel on Wednesday as military strikes between the United States and Iran severely disrupted tanker traffic through two critical Middle East waterways. The escalation marks a severe shock to global energy supply chains, directly threatening the physical movement of oil out of the Persian Gulf region.
With the Strait of Hormuz deemed too hazardous by many shipowners, Saudi Arabia’s strategic pipeline workaround has suddenly become a liability. To mitigate Hormuz risks, the kingdom has increasingly relied on a pipeline to pump its crude to the Red Sea, loading it onto tankers along the west of the Arabian Peninsula. However, these vessels must then travel south through the Bab al-Mandab strait to reach international markets.
That narrow southern passage is now an active conflict zone. The Iranian-backed Houthi militia, which controls parts of neighboring Yemen, announced a blockade on Saudi Arabia’s Red Sea ports on July 20. On Tuesday, Houthi spokesman Yahya Saree claimed the group struck a Saudi tanker in the Red Sea off the Yemeni coast. The United Kingdom Maritime Trade Operations recorded a corresponding report of "suspicious activity" in the area. According to the UKMTO, a ship's master reported hearing an explosion, though the vessel and crew were subsequently confirmed safe.
Supply chain squeeze
For commodities traders and corporate risk managers, the simultaneous threat to both the Strait of Hormuz and the Bab al-Mandab strait presents a compounded logistical crisis. If shipowners scale back voyages due to elevated war risk premiums or direct physical threats, the market faces a tangible supply deficit. The jump above $90 a barrel reflects these immediate disruptions, but prolonged risks to Saudi export routes could easily keep prices elevated as global inventories draw down.
