Tankers keep sailing Red Sea despite Houthi threats as Saudi oil lifeline faces strains

Commercial traffic continues flowing through the Red Sea’s southern choke point despite renewed Houthi threats, with ship-tracking data showing more than a dozen oil tankers sailing in the vicinity of the Bab el-Mandeb Strait as of Tuesday evening.

This comes after shipping through the waterway rose on Monday as President Donald Trump signaled a return to negotiations to end the US-Iran war, following the collapse of a ceasefire earlier this month that once again brought traffic in the Strait of Hormuz to a near standstill. 

Still, clashes between Saudi Arabia and Yemen's Houthis have added another layer of risk for a global economy attempting to absorb the loss of Gulf oil exports through Hormuz. Simultaneously, shipping operators remain cautious in the Red Sea, with many tankers transiting the Bab el-Mandeb choke point on Tuesday openly broadcasting their Chinese or Russian crews as they signal to the Iran-backed Houthis that they aren’t affiliated with Western or Saudi interests.

Details: Red Sea transits have slowed since the Yemeni group declared a blockade on Saudi shipping on July 20 and threatened the kingdom's oil facilities. The Houthis on Monday targeted crude transport infrastructure linked to Saudi Arabia's East-West pipeline, the system that has enabled Riyadh to continue exporting significant volumes of oil despite the Hormuz disruptions

But unlike the near collapse in commercial traffic seen during the Houthis’ last campaign targeting shipping — which started in late 2023 amid the Gaza war — vessels continue transiting the waterway. Data from maritime analytics firm Windward nevertheless showed Bab el-Mandeb crossings fell roughly 22% in the six days after the Houthi declaration. 

Ship-tracking portals on Tuesday showed dozens of tankers moving between the Suez Canal and Saudi Arabia's western ports — including near Yanbu and Rabigh, both hubs for oil and petrochemical exports — while other crude tankers plied southern waters near Bab el-Mandeb. On Monday, 28 vessels transited Bab el-Mandeb, the highest daily total in four days, but still well below the month's peak of 46 vessels on July 14, Reuters reported. Four oil tankers entered the Red Sea while 10 departed on Monday, including the Hong Kong-flagged VLCC New Pearl, carrying roughly 2 million barrels of Saudi crude to China.

Shipping patterns are also becoming more complex. Bloomberg reported that the VLCC Olympic Luck exited the Red Sea through the Suez Canal on Sunday evening before beginning the longer voyage around Africa toward Asia, becoming one of the first supertankers hauling Saudi crude to take the more expensive route rather than risk Bab el-Mandeb. 

The evolving routing reflects mounting security concerns rather than a complete shutdown. Market intelligence firm Kpler said vessel operators increasingly appear to be making voyage decisions based on real-time risk assessments instead of avoiding the Red Sea altogether.

Why it matters: The Red Sea has remained a critical outlet for Gulf energy exports blocked by Iran, with Saudi pipeline flows to the kingdom’s western coastline helping cushion the global supply shock caused by the conflict. That makes the latest Houthi threats potentially more consequential than headline vessel counts alone suggest. 

Unlike in 2023, the group doesn’t necessarily need to empty the Red Sea to disrupt markets. Even modest interference with Saudi exports could increase freight costs, complicate voyage planning and tighten prompt crude supply at a time when global energy flows are already under strain and strategic reserves have fallen to historic lows.

Kpler said attacks around the Bab el-Mandeb Strait have effectively disrupted a route that normally carries about 3 million barrels per day of Arab crude, widening price spreads and encouraging Atlantic Basin barrels to flow toward Asia. Longer voyages, ship-to-ship transfers and higher insurance premiums are also adding costs across global supply chains.

For now, ships are still sailing and Saudi crude continues to reach international buyers, whether through Bab el-Mandeb or via longer routes through the Suez Canal. But if the Houthis succeed in making Yanbu as difficult to use as Hormuz, the global economy could lose one of the last remaining pressure valves preventing the regional conflict from triggering a far broader energy crisis.

Longer term, however, Red Sea risks could evolve. On Monday, Yemeni Foreign Minister-designate Afrah Al-Zouba warned reporters in Riyadh that the Houthis aim to replicate Iran's Hormuz strategy in the Red Sea. This comes as Tehran’s effective control and plans to charge tolls on vessels transiting the waterway are set to be an enduring challenge that will likely outlive the current US-Iran hostilities. 

Know more: On Tuesday, Saudi Arabia’s stock market sank to the lowest levels since the first week of the US-Israel-Iran war. Until recently, the kingdom had mostly defied broader market headwinds as Saudi Aramco helped prop up local equities amid higher oil prices.