Bab el-Mandeb Ship Traffic Plummets After Houthi Strikes on Saudi Oil Sites

The maritime landscape in the Middle East has shifted from a localized conflict to a dual-chokepoint crisis. While the U.S. and Iran paused strikes over the weekend to allow for diplomacy, the Iran-backed Houthis have expanded the theater of operations, targeting the Red Sea coast to squeeze Saudi Arabian exports. This strategic pivot has turned the Bab el-Mandeb strait into a high-stakes alternative for oil that is now under direct threat.

Houthi Blockades and the Attack on Saudi Oil Sites

The sudden drop in traffic through Bab el-Mandeb follows a series of aggressive maneuvers by Houthi forces. Military spokesperson Yahya Saree stated the group struck facilities belonging to Saudi state oil company Aramco in the cities of Yanbu and Jizan on Saturday. These strikes were part of a broader effort to enforce a naval blockade announced earlier in the week.

The blockade’s impact is not merely rhetorical. The Houthis claimed to target the Saudi-flagged tankers Encelia and Layla using drones, cruise missiles, and ballistic missiles. According to the Saudi state news agency SPA, the Encelia was struck while sailing in the Red Sea, which caused a fire on the ship’s bow. While all crew members were reported safe, the incident signaled a dangerous escalation in the risk calculus for commercial operators.

The Saudi-led coalition has responded by describing these threats as a blatant violation of international law and acts of maritime piracy. To counter the threat, the coalition announced new measures to protect commercial shipping on July 21.

Kpler Data: A Collapse in Vessel Transits

Shipping data from Kpler reveals a stark decline in activity. On Sunday, only 11 commodity vessels passed through Bab el-Mandeb. The composition of this traffic highlights the desperate nature of current energy logistics: seven were oil tankers, including two very large crude carriers (VLCCs) heading to Yanbu to load crude.

Houthis Launch Missile and Drone Strikes on Saudi Aramco Facilities

Exiting the Red Sea on Sunday were four vessels, most notably the Hong Kong-flagged VLCC New Explorer, which carried 2 million barrels of Saudi and Emirati crude destined for Ningbo, China. This was the third Chinese VLCC to exit via the strait. Other departures included a tanker with 1 million barrels of Russian crude for China and another with 750,000 barrels of Saudi crude for Pakistan.

Simultaneously, the Strait of Hormuz remains severely choked. Despite the pause in U.S.-Iran strikes, fewer than 10 commodity vessels passed through the strait daily over the weekend. Saturday saw only three vessels, all of which had their transponders switched off. These included a VLCC bound for Qatar and a tanker carrying Qatari naphtha to Japan.

The $100 Barrel: Energy Market Volatility

The intersection of the Hormuz blockade and the Houthi threats has sent oil prices on a rollercoaster. Brent crude recently breached the $100 a barrel mark, jumping more than 13% in a matter of days. Some market fears pushed expectations toward $120 (£90) a barrel.

Saudi Oil Tankers Perform U-Turns After Houthi Naval Blockade Threat

However, the market reacted sharply to the news of a diplomatic pause. On Monday, July 27, Brent crude futures fell $4.89, or 5.05%. U.S. West Texas Intermediate crude also dropped $4.67, or 5.23%, settling at $84.64 a barrel.

This volatility is driven by the extreme sensitivity of the two chokepoints. While Hormuz typically handles 20% of global oil supplies, Bab el-Mandeb has become a vital alternative for Saudi Arabia. Riyadh has rerouted oil via a pipeline from its Abqaiq processing plant to the Yanbu export terminal to bypass the Gulf, making the Red Sea route an essential lifeline that the Houthis are now targeting.

Insurance Barriers and the Cost of Risk

Beyond the physical danger of missiles, a financial wall is rising. Maritime insurance is transforming from a routine overhead into a prohibitive barrier. According to Reuters, war-risk insurance premiums rose to approximately 0.75% of a vessel’s insured value, up from 0.3% just days before the Houthi blockade announcement.

This shift is reinforced by security classifications. For bulk shipping, where margins are thin, these additional costs—often amounting to hundreds of thousands of dollars per voyage—can make trade economically unviable.

Houthis Declare Maritime Blockade on Saudi Arabia Threatening Oil Supplies

Diplomatic Pauses and Strategic Deadlocks

The current lull in fighting is fragile. United States Ambassador to the United Nations Mike Waltz stated that President Donald Trump paused attacks to allow more time for diplomacy. There are reports that regional mediators have proposed a 10-day ceasefire to put a previous memorandum of understanding back on track.

Despite the pause, the structural divisions remain deep. U.S. Central Command (CENTCOM) recently struck Iranian military command centers, drone launch sites, and air defense systems to degrade Iran’s ability to attack commercial vessels in Hormuz.

The path to stability is narrow. Analyst Saul Kavonic notes that any rebound in flows through the Strait of Hormuz will likely be slow and partial because shippers require greater confidence in their safety before returning empty ships to the region. The immediate focus remains on whether a 14-point memorandum of understanding, with clearer controls over the Strait of Hormuz, can serve as a viable starting point for a lasting ceasefire.