Tankers with Saudi crude turn back as Houthis open new front in US-Iran war

By Jana Choukeir, Nayera Abdallah and Elwely Elwelly

DUBAI, July 21 (Reuters) - Two oil tankers carrying Saudi crude to Asia reversed course in the Red Sea on Tuesday after threats from Yemen's Iran-aligned Houthis, as a widening Middle East conflict disrupted shipping through two of the world's most critical energy chokepoints.

U.S. forces bombed targets in the south and west of Iran overnight, while Tehran targeted U.S. sites in Bahrain, Kuwait and Jordan and a tanker was hit in the Strait of Hormuz at the mouth of the Gulf.

Iran said it had struck infrastructure belonging to Amazon in Bahrain, where the U.S. tech company operates a regional data centre. Amazon did not immediately comment and Reuters could not verify the report.

The Houthis, who control northern and western Yemen including the coast at the mouth of the Red Sea, announced a naval blockade on Saudi Arabia on Monday, opening a potential new front in the war. In a letter to shippers, they threatened to attack any ships that load or discharge Saudi oil.

U.S. President Donald Trump said the Houthis had not yet shut the Bab el-Mandeb, the "Gate of Tears" strait leading into the Red Sea, and threatened to act against them if they did.

"So far it hasn't happened. Might happen, but we take care of things. If something like that happens, we take care of it," Trump said.

But the Houthi announcement already appeared to be having an impact. Two tankers which had just loaded Saudi crude bound for China and India at Saudi Arabia's Red Sea port of Yanbu made U-turns on Tuesday, heading towards the Suez Canal rather than out through the Bab el-Mandeb into the Indian Ocean.

"The developments represent the first confirmed changes to commercial tanker routing following the (Houthi) embargo and are likely to increase disruption to Saudi crude exports and regional shipping patterns," British maritime risk management group Vanguard said on Tuesday.

With the war shutting the Strait of Hormuz leading out of the Gulf, the Red Sea has served as the main alternate route out for millions of barrels of Saudi oil per day, diverted by pipeline through Yanbu.

Oil prices gained more than 2% on Tuesday, with Brent crude hovering above $91 a barrel and U.S. gasoline back over $4 a gallon.

U.S. STRIKES SOUTHERN, WESTERN IRAN

U.S. Central Command said it had hit Iranian military command centers, maritime capabilities, missile and drone launch sites and air defence systems in its latest round of strikes, which have carried on nightly for more than a week and a half.

Explosions were heard around the city of Shiraz in southern Iran, state media said. Konarak and Chabahar on the southern coast, the city of Khorramabad and a civilian site outside the city of Abdanan, both in the west, all came under attack, media reports said. Later the IRNA news agency quoted an official in Khorramabad as saying no enemy attack had taken place there.

Fifty civilians have been killed and 500 wounded in the recent U.S. strikes on Iran, a health ministry official said. Washington has reported three U.S. soldiers killed in recent days in the region and says it is punishing Iran for their deaths.

IRAN STRIKES ACROSS THE REGION

The United States and Iran have been testing the limits of escalation since the collapse this month of a weeks-old interim deal to halt fighting.

Iran launched renewed attacks on Tuesday across the Gulf, where recent strikes on desalination facilities have raised concerns about shortages in desert countries that depend almost entirely on removing salt from seawater for potable supplies.

Kuwait said it was responding to a drone and missile attack on Tuesday afternoon. Kuwait has reported attacks that have damaged power generation in recent days at plants that also produce fresh water.

Sirens sounded in Bahrain where Iran's Revolutionary Guards said they targeted infrastructure belonging to Amazon, in response to what they described as a U.S. strike on the construction site of a planned Iranian nuclear power plant.

Iranian state media reported that Iranian forces also launched attacks on U.S. military barracks in Bahrain and bases in Kuwait and Jordan.

TANKERS STRUCK

The maritime security agency UKMTO said on Tuesday a tanker in the Strait of Hormuz reported being struck by a projectile, forcing its crew to abandon the vessel and board a lifeboat.

Iran's Revolutionary Guards also said two oil tankers had caught fire after explosions while attempting to transit the southern shipping lane of the strait.

Washington has encouraged ships to use the southern lane through the strait. Iran demands they use an alternative northern route near its coast instead, where it eventually aims to charge fees for transit.

Just four commodity vessels crossed Hormuz on Monday, mostly using the northern shipping lane near Iran's coast, down from seven the previous day, Kpler data showed.

Throughout the war, Saudi Arabia partially escaped the shipping disruption by piping oil to Yanbu on the Red Sea instead. But a full closure of that alternative route by the Houthis could reduce global oil supply as it would leave most Saudi oil exports trapped.

DIPLOMATIC PUSH TO RESTORE CEASEFIRE

A senior Iranian official told Reuters on Monday that Tehran had received a proposal from mediators for a 10-day ceasefire in efforts to salvage the interim deal, intended to pave the way to a lasting deal to end the war that began on February 28 with U.S.-Israeli attacks on Iran.

In a sign that diplomacy remains alive, Iran's Interior Minister Eskandar Momeni visited mediator Pakistan and asked Islamabad to continue its efforts.

Trump, hosting the president of Lebanon at the White House for talks on a ceasefire in a parallel war between Israel and Iran's Lebanese Hezbollah allies, said the Iranians "want to desperately meet, and until they're ready to meet in a meaningful way, we have no interest."

(Reporting by Reuters bureaux; Writing by Ros Russell and Peter Graff; Editing by Philippa Fletcher, William Maclean)