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

The change in course for these vessels marks a potential second disruption to global shipping routes, compounding energy market concerns already heightened by the closure of the Strait of Hormuz. With the Strait of Hormuz blocked, Saudi Arabia’s Red Sea port of Yanbu has served as the primary alternative for exporting millions of barrels of oil per day.

Houthi Blockade Threat

On Monday, the Houthi militia declared a naval blockade against Saudi Arabia. In an email sent to shipping companies, the group warned vessels against loading or discharging cargo at Saudi ports, stating that such activity could result in ships being targeted "in any location" within reach of the militia.

The Houthis control northern Yemen, including territory along the coast of the Bab el-Mandeb, the strategic strait at the mouth of the Red Sea. While the militia has not formally announced the closure of the waterway, the threat has raised significant concerns regarding the safety of a channel that carries 7% of global maritime traffic. According to Allison Minor of the Atlantic Council, while the Houthis have not clarified their specific targeting criteria, the blockade announcement implies that any ship visiting Saudi ports to carry Saudi oil could be in the crosshairs.

Impact on Tanker Operations

Shipping data confirmed the following maneuvers by vessels departing or approaching the region:

• Xin Long Yang: A Very Large Crude Carrier (VLCC) carrying 2 million barrels of Saudi crude destined for China.
• Rodos: A smaller tanker carrying approximately 700,000 barrels of Saudi crude intended for India.
• Amazon: A ‘Suezmax’ tanker that loaded crude on Tuesday destined for India.
• New Prime: A VLCC scheduled to arrive at Yanbu to load crude, which turned back off the coast of Oman before entering the Red Sea.

By Tuesday, these vessels had switched off their transponders. While the port of Yanbu remains operational for ships already in the Red Sea or arriving via the Suez Canal, some other vessels, such as the Olympic Luck, continued their transit toward the port.

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Managers for the affected tankers, including Dynacom Tankers Management and Cosco Shipping, did not immediately respond to requests for comment.

Insurance and Security Risks

The threat has triggered immediate reactions within the maritime and insurance sectors. British maritime security firm Ambrey has advised that vessels calling at Saudi Arabian ports are at "high risk." The company recommended that operators reconsider transiting the Red Sea and implement enhanced mitigation measures. Insurance industry sources reported that war risk insurance costs for Saudi ports have risen in the past 24 hours as underwriters re-evaluate risk assessments.

Global Energy Implications

Redirecting tankers through the Suez Canal rather than the Bab el-Mandeb forces vessels to navigate through the Mediterranean and around Africa to reach Asian markets, a detour that adds weeks to voyage times.

"While an actual blockade seems unlikely given the resources required for such an undertaking, a step-up in hostilities could see Houthis targeting Saudi-associated ships transiting the Bab el-Mandeb strait," the ship broker Clarksons noted on Tuesday.

According to market observers, while the impact on consumers will not be immediate, the ongoing conflict with Iran has left the global energy system vulnerable. "We could weather it for two weeks, three weeks, even a month, but even in that time, we will see higher freight rates, higher energy prices and that bleeds into higher energy consumer costs," experts noted.