Houthi tanker strikes push Brent past $96 as Red Sea chokepoint tightens

The Houthi strikes on Saudi oil tankers in the Red Sea pushed Brent crude above $96 a barrel Thursday, extending a six-week high as the US-Iran war creates simultaneous chokepoints on the world's two most critical oil transit routes.

"The dual blockade effectively traps Saudi crude between two fires — unable to exit via Hormuz or the Red Sea," said Michael Mulroy, a former deputy assistant secretary of defense for the Middle East. "The Houthis have proven many times they have the ability to obstruct maritime traffic in the Bab el-Mandeb."

Brent crude futures rose more than $2 to $96.09 a barrel, the highest level in six weeks. The Houthis claimed strikes on two Saudi-flagged vessels — the Encelia and the Layla — as part of a naval blockade on Saudi Arabia announced Monday. The Encelia transmitted a distress call after being struck by a projectile about 70 nautical miles southwest of Al Shuqaiq, Saudi Arabia, according to the United Kingdom Maritime Trade Operations. All crew members were safe, Saudi state news agency SPA reported.

The Red Sea escalation compounds an already severe energy crisis. Iran's near-total blockade of the Strait of Hormuz — which handles about 21 percent of global seaborne oil trade — has already cut daily vessel crossings by 31 percent to just nine ships, according to Kpler data. Iraq said the closure has cost its economy between $40 billion and $45 billion, with monthly oil revenues plunging from $7-8 billion to less than $1.5 billion. The Houthi threat to the Bab el-Mandeb, through which Saudi Arabia has diverted millions of barrels per day to its Yanbu port, now threatens the kingdom's only remaining export route.

Traffic through both straits declined sharply on July 21, with Bab el-Mandeb crossings down 34 percent to 29 vessels, Kpler data showed. Four confirmed vessel U-turns near the Gulf of Aden suggest operators are becoming more cautious following Houthi threats against Saudi-linked shipping. Two Chinese very large crude carriers carrying 4 million barrels of Saudi oil resumed their southward journey through the Bab el-Mandeb late Wednesday, shipping data from LSEG showed, suggesting some operators remain willing to test the route.

The last time the Houthis conducted a sustained campaign against Red Sea shipping — under the Biden administration in 2024 — the group disrupted commercial traffic for months despite intensive US and British airstrikes. The group has withstood years of bombing by a Saudi-led coalition and more recent US campaigns, according to Reuters, suggesting the current threat may persist regardless of military response.

The broader US-Iran conflict shows no signs of de-escalation. The US military completed its 12th consecutive night of strikes on Iran late Wednesday, targeting maritime capabilities, missile and drone storage facilities, coastal surveillance sites and air defense assets, according to Central Command. CENTCOM said it has redirected nine commercial vessels and disabled one to prevent ships from entering or departing Iranian ports. Iran, meanwhile, claimed attacks on US military facilities in Kuwait, Bahrain and Jordan, including what it described as a Patriot air defense system and an MQ-9 Reaper drone hangar at Ali Al-Salem Air Base.

The human and political costs are mounting. The Pentagon has confirmed 18 American military fatalities, and opinion polls show fewer than 30 percent of Americans now support the war. The US House of Representatives approved up to $73 billion in additional funding for the war effort, highlighting the widening gap between Washington's military objectives and growing public unease.

The dual chokepoint crisis has also rippled into cryptocurrency markets. Bitcoin and XRP pared recent gains as the geopolitical escalation triggered a broad risk-off move, with investors fleeing speculative assets as energy costs surged and inflation concerns deepened. The simultaneous disruption of both the Strait of Hormuz and the Bab el-Mandeb — through which a substantial share of the world's seaborne oil trade passes — has created a supply shock that analysts warn could persist as long as the US-Iran conflict continues.

This article is for informational purposes only and does not constitute investment advice.