Oil tanker struck 70 miles off Saudi Arabia as Houthi blockade escalates

A crude tanker was hit off Saudi Arabia, the first attack since the Houthis declared a naval blockade threatening Red Sea crude exports.

A crude oil tanker was struck by an unidentified projectile about 70 nautical miles off Al Shuqaiq, Saudi Arabia, igniting a fire onboard and escalating a Houthi naval blockade that threatens the kingdom's primary alternative export route.

"Anything that restricts shipping through the Red Sea would be problematic for the same reasons that the Strait of Hormuz is problematic," Marco Rubio, US Secretary of State, said at a regional summit in the Philippines. The US has contacted Saudi Arabia multiple times over the past week about the threats, he said.

The vessel's captain reported the attack to the UK Maritime Trade Operations Office after a projectile of unknown origin struck the tanker. The incident follows warnings from three Houthi officials who said the group told international shipping companies on Monday to avoid transiting the Bab el-Mandeb Strait, the southern gateway to the Red Sea. Tracking data from MarineTraffic.com showed at least three tankers made U-turns in the Red Sea after the threats, while a Houthi-run news agency claimed six ships were forced to reroute.

The attack compounds a crisis for global oil markets already dealing with the closure of the Strait of Hormuz since late February, through which a fifth of the world's oil passed in peacetime. Saudi Arabia has relied on a pipeline to the Red Sea to bypass Hormuz and get millions of barrels to market — a route now directly threatened by the Houthi blockade.

The Houthis, armed and significantly influenced by Iran, opened a new front against Saudi Arabia by declaring a naval blockade of the kingdom this week. Rubio blamed Iran for the group's actions, calling Tehran "the troublemaker in the region." Pakistan, a longtime Saudi ally with a mutual defense pact signed last year, condemned the threats as a violation of international law and warned that any hostile act against Pakistani-flagged vessels would be regarded as a grave threat to national security.

The last time the Bab el-Mandeb Strait faced a sustained blockade threat was during the 2015 Saudi-led intervention in Yemen, when Houthi forces targeted coalition vessels. The current escalation carries greater weight because Saudi Arabia's reliance on Red Sea export routes has deepened since the Strait of Hormuz closure. The kingdom now ships the majority of its crude through the Red Sea via the East-West Pipeline, which has a capacity of about 5 million barrels per day, according to Saudi Aramco's published specifications.

For oil markets, the attack introduces a second chokepoint risk premium on top of the existing Hormuz disruption. Brent crude and WTI are expected to open higher as traders price in the possibility of simultaneous blockages at both the Strait of Hormuz and Bab el-Mandeb — a scenario that would trap the bulk of Middle East crude supply. Shipping and insurance costs in the region are also likely to surge as vessels avoid Red Sea routes.

Pakistan's Foreign Ministry said it was "particularly concerned by reports of threats directed against vessels engaged in lawful commercial trade with the Kingdom." The US and Pakistan jointly condemned the Houthi actions on Wednesday, with both nations calling for de-escalation and adherence to international maritime law.

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