{"id":681,"date":"2026-07-21T04:41:45","date_gmt":"2026-07-21T04:41:45","guid":{"rendered":"https:\/\/officemovingamerica.com\/?p=681"},"modified":"2026-07-21T04:41:45","modified_gmt":"2026-07-21T04:41:45","slug":"houthi-red-sea-blockade-would-lift-oil-prices-but-workarounds-could-limit-impact","status":"publish","type":"post","link":"https:\/\/officemovingamerica.com\/?p=681","title":{"rendered":"Houthi Red Sea Blockade Would Lift Oil Prices, but Workarounds Could Limit Impact"},"content":{"rendered":"
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By Ahmad Ghaddar and Arathy Somasekhar<\/p>\n<\/div>\n

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LONDON\/HOUSTON, July 20 (Reuters) – A successful effort by Yemen’s \u2060Houthis \u2060to shut the Bab el-Mandeb Strait would strike \u2060at one of the world’s most important oil shipping routes, potentially triggering a fresh surge in crude \u200bprices, disrupting fuel supplies and adding to strains on the global economy.<\/p>\n

Read more Grid Operator in US Central States Warns of Potential Rolling Blackouts<\/a><\/p>\n<\/div>\n

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Yemen’s Iran-aligned Houthis on Monday declared a naval blockade against Saudi Arabia, its military spokesperson said. \u200cA closure of the Red Sea’s southern \u200cgateway would remove a critical alternative route for the kingdom to the Strait of Hormuz and intensify fears of shortages.<\/p>\n<\/div>\n

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“After oil prices moved higher on \u2060escalating U.S.-Iran tensions \u2060last week and the resulting slowdown in Hormuz transits, traders are watching for catalysts that would \u200bjustify a further rally,” said Richard Bronze of consultancy Energy Aspects.<\/p>\n<\/div>\n

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“The Houthis resuming maritime attacks and effectively shutting the Bab el-Mandeb would certainly qualify.”<\/p>\n<\/div>\n

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Oil rose less than 1% after the Houthi statement to trade around $89 a barrel. Hopes of Iran and the United States resuming peace talks had earlier weighed on prices. Oil futures have \u200bpeaked at $126 this year – below 2008’s all-time high of $147.<\/p>\n<\/div>\n

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ASIAN REFINERS WOULD FACE DELAYS IN GETTING CRUDE<\/p>\n<\/div>\n

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The Bab el-Mandeb connects the Red Sea \u2060with the \u2060Gulf of Aden and is a \u2060key route for crude \u200band fuel shipments moving between the Middle East, Europe and Asia. Since Houthi attacks on shipping began in 2023, many vessels have \u200balready rerouted around Africa, adding costs and \u2060delays to global trade.<\/p>\n<\/div>\n

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A full closure would have the biggest immediate impact on Saudi crude exports from the Red Sea port of Yanbu. Matt Smith, commodity research director at Kpler, said Asian refiners receiving those barrels could face delays of around a month as tankers are forced to sail around the Cape of Good Hope.<\/p>\n<\/div>\n

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“The impact is going to be massive in the first month,” Smith said. “The biggest impact is going to be on Saudi flows.”<\/p>\n

Read more FBI Director Kash Patel Planning a Trip to Russia, Politico Reports<\/a><\/p>\n<\/div>\n

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Bronze estimated \u2060that more than 3 million barrels per day of Saudi crude currently shipped via the Red Sea to Asia \u2060could be forced onto much longer routes. The disruption would create logistical bottlenecks because fully loaded VLCCs cannot transit the Suez Canal while capacity on Egypt’s SUMED pipeline, which links the Red Sea and Mediterranean Sea, is fixed.<\/p>\n<\/div>\n

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Saudi Arabia has shipped on average over 4.5 million bpd of crude and fuel from Yanbu since April, about 70% of which went to Asia, Kpler data shows.<\/p>\n<\/div>\n

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The impact would extend far beyond oil markets, said John Paisie, president of consultancy Stratas Advisors.<\/p>\n<\/div>\n

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“If they really stop and severely hinder those barrels through the Red Sea, that is going to have an impact on oil prices as well as refined product prices,” he said. “It undermines the whole global economy. At some point, you could have a global recession.\u201d<\/p>\n<\/div>\n

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The immediate oil market reaction would likely be another \u2060jump in crude prices as refiners compete for available supplies, analysts said. Paisie said oil prices could climb back above $115-$120 a barrel, while freight and insurance costs would also rise as ships take longer routes around Africa.<\/p>\n<\/div>\n

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European diesel refining margins surged to a record above $65 a barrel on Friday and remained near that level on Monday. Supplies of diesel and jet fuel from Asia and \u200bthe Middle East to Europe typically transit the Bab el-Mandeb.<\/p>\n<\/div>\n

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(Reporting by Ahmad Ghaddar and Robert Harvey in London, \u200band Arathy Somasekhar in Houston, editing by Alex Lawler and Sanjeev Miglani)<\/p>\n

Read more Trump Orders Tightening of Defense Supply-Chain Waiver Rules<\/a><\/p>\n<\/div>\n

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Copyright 2026 Thomson Reuters<\/b>.<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

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