Yemen’s Iran-aligned Houthis declared an immediate naval blockade on Saudi Arabia on Monday, Reuters reported, bringing the U.S.-Iran war officially to the southern entrance of the Red Sea and threatening an export route used by Riyadh to bypass disruptions in the Strait of Hormuz.
The group said the “maritime embargo” was retaliation for what it described as a Saudi siege of Yemen, Reuters reported. Saudi Arabia had not responded to the announcement as of the time of writing.
Iran had previously instructed the Houthis to prepare to close the Bab el-Mandeb Strait if the United States continued attacking Iranian power infrastructure. A full closure could disrupt oil shipments equivalent to about 7% of global supply, according to Reuters, leaving Saudi Arabia exposed at both ends of its export system as tanker traffic through Hormuz remains sharply reduced.
The Houthi declaration followed a ninth consecutive night of U.S. attacks on Iran. Tehran reported strikes in Tabriz, Chabahar, Konarak, Bandar Mahshahr and Bandar Imam Khomeini, while Iran’s Revolutionary Guards said they had attacked U.S. military assets in Jordan, Kuwait and Syria. Kuwait also reported another attack on a desalination plant, causing a fire.
Oil movements through the Gulf are deteriorating again. Satellite imagery reviewed by Reuters showed only one ship-to-ship oil transfer outside Hormuz on July 18, down from three a week earlier. Maritime sources estimated that only two or three transfers had occurred in recent days, and supertanker crossings through Hormuz fell to an average of two per day last week from eight per day in late June and early July.
Brent crude briefly traded above $90 per barrel after the blockade announcement before retreating as traders assessed reports of renewed ceasefire efforts. Iran has received a proposal for a 10-day ceasefire, and both Tehran and Washington have left open the possibility of renewed negotiations. Brent later traded near $88.04 per barrel, while West Texas Intermediate slipped to about $82.29.
By Charles Kennedy for Oilprice.com
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