Houthi Red Sea Blockade Threat Could Remove 4% of Global Oil Supply and Intensify Energy Market Disruptions

Saudi Arabia has diverted huge amounts of oil to the Red Sea since the Iran war began, but now the Iranian-backed Houthi militants say that they intend to block that route.

o The Iran-backed Houthi militia has threatened to block ships travelling to and from Saudi Arabia through the Red Sea, endangering a key alternative route for global oil exports.

2. Saudi Arabia's Alternative Export Route

o Since the outbreak of the Iran conflict, Saudi Arabia has relied on its east-west pipeline to transport crude oil from the Persian Gulf to Yanbu on the Red Sea for export.

3. Dependence on Bab al-Mandab

o Most Saudi oil exported via the Red Sea passes through the Bab al-Mandab Strait, located near Houthi-controlled territory in Yemen.

o A smaller share is transported north through Egypt's SUMED pipeline or the Suez Canal.

4. Potential Impact on Global Oil Supplies

o A successful Houthi blockade would disrupt Saudi Arabia's principal alternative to the Strait of Hormuz and further tighten already constrained global oil supplies.

5. Initial Shipping Response

o Two oil tankers—Rodos and Xin Long Yang—reversed course after approaching the Bab al-Mandab Strait, indicating increased caution among shipping operators.

6. Oil Markets Remain Cautious

o Despite the threat, Brent crude continued to trade around US$91 per barrel, suggesting markets remain uncertain whether the Houthis will act.

7. Possible Loss of Global Supply

o Analysts estimate that a complete closure of Saudi exports through the Red Sea could remove approximately 4% of global oil supplies, in addition to disruptions already affecting the Strait of Hormuz.

8. Saudi Export Volumes

o Saudi Arabia is currently exporting about 3.6 million barrels per day of crude oil and refined fuels through the Bab al-Mandab, mainly to Asian markets.

o Before the conflict, most Saudi exports were shipped through the Strait of Hormuz.

9. Hormuz Already Under Pressure

o Continued military activity involving the United States and Iran has made the Strait of Hormuz increasingly dangerous and unreliable for commercial shipping.

10. Limited Alternative Routes

o Saudi Arabia can redirect exports through:

§ Egypt's SUMED pipeline, or

§ The Suez Canal.

o However, both options have significant operational limitations.

11. Operational Constraints

o The SUMED pipeline lacks sufficient capacity to handle all diverted Saudi exports.

o Fully loaded Very Large Crude Carriers (VLCCs) cannot transit the Suez Canal due to draft restrictions.

12. Higher Costs and Longer Transit

o Shipping Saudi oil to Asia via the Mediterranean would require vessels to sail around Africa, increasing transit time by about four weeks and substantially raising transport costs.

13. Overall Implication

o A Houthi blockade of the Bab al-Mandab would significantly disrupt global energy supply chains, reduce available oil supplies, increase freight costs, and could trigger a sharp rise in international crude oil prices if sustained.

[ABS News Service/22.07.2026]

If the Houthis make good on their threat to blockade ships traveling to and from Saudi Arabia via the Red Sea, it would yet again upend global oil markets by compromising a crucial fallback for the Strait of Hormuz.

Since the early weeks of the war with Iran, Saudi Arabia has been relying on a pipeline that bisects the country to reroute millions of barrels of oil from the Persian Gulf to the Red Sea.

Most of that oil gets to market via the Bab al-Mandab strait at the southern end of the Red Sea, off the coast of Yemen and near territory controlled by the Iranian-backed Houthi militia. A smaller portion goes north to the Mediterranean Sea, via a pipeline that crosses Egypt or, in the case of oil-derived fuel, via the Suez Canal.

Any disruption to those alternatives would further restrict the supply of oil and fuels to a market rattled by renewed attacks on vessels in the Persian Gulf. The threats already appear to be having an impact. Two oil tankers, the Rodos and the Xin Long Yang, that were headed toward the Bab al-Mandab made U-turns on Tuesday, according to the maritime data firm Kpler.

But if oil prices are any guide, the market appears skeptical that the Houthis will follow through. Oil was trading around $91 a barrel on Tuesday, about the same price it had been before the militia made its threat.

The risks are grave, however. If the Houthis manage to completely block Saudi Arabia from using the Red Sea, they would take roughly 4 percent of the world’s oil off the global market. That estimate, based on shipping data from Kpler, would be in addition to the current loss of supply through the Strait of Hormuz.

Given the Houthis’ proximity to Bab al-Mandab, it would presumably be easiest for them to disrupt shipping there. Saudi Arabia has been using that choke point to export roughly 3.6 million barrels a day of oil and fuels, mostly to Asia, according to Kpler. That is up from very low levels before the war, when almost all Saudi exports passed through the Strait of Hormuz.

Now, the United States and Iran are both policing that waterway, which has become much more dangerous and less reliable.

While the pipeline across northeast Egypt and the Suez Canal present alternatives for transporting Saudi oil and fuels, they aren’t as appealing as Hormuz or Bab al-Mandab.

There are a few reasons for that, namely that it would take much longer and be much more expensive to send oil to Asia that way. Very large ships used to transport crude oil cannot use the Suez Canal, at least not when they are full and heavy. Sumed, the Egyptian pipeline, on the other hand, cannot accommodate all of the oil that Saudi Arabia has been moving through Bab al-Mandab. Plus, it would take an additional four weeks to reach Asia via the Mediterranean Sea because ships would have to go around Africa.