A Malta-flagged tanker, identified as the Kavomaleas and managed by Dynacom Tankers Management, caught fire on July 20 after being hit by an unknown projectile near the Strait of Hormuz, approximately 8 nautical miles northwest of Kumzar, Oman. The crew safely abandoned the vessel and were rescued, but the tanker was left adrift with the fire active. This incident marks the latest in a series of attacks on commercial shipping since tensions between the US and Iran escalated earlier this month.
Simultaneously, Yemen's Houthi rebels announced a "maritime embargo" against Saudi Arabia on Monday, threatening to close the Bab el-Mandeb Strait to Saudi vessels. This declaration further jeopardizes global energy supplies, as the Strait of Hormuz has been significantly disrupted since late February following US-Israeli strikes on Iran. With both major Middle Eastern oil export routes under threat, the Red Sea, through the Bab el-Mandeb, has become a critical alternative. Total petroleum volumes transiting Bab el-Mandeb rose to 7.4 million barrels per day (bpd) in June, up from 4.2 million bpd last year, representing about 7% of global oil output.
In response to the Hormuz disruptions, Saudi Arabia has rerouted over 70% of its daily crude exports to the Red Sea port of Yanbu. Shipments from Yanbu have averaged 4 million bpd in recent weeks, a significant increase from 973,000 bpd a year prior. However, the Houthi blockade on the Red Sea escalates the risk of a dual disruption. The Islamic Revolutionary Guard Corps (IRGC) in Iran claimed two tankers "exploded" after attempting an "unsafe southern route" through the Strait of Hormuz, an incident for which Reuters noted it was unclear if it was connected to the Kavomaleas attack.
The renewed instability has pushed Brent crude, the international oil benchmark, to $88.44 a barrel on Monday, up 0.38% on the day and 13.57% over the past month, after briefly climbing to $91.01. Analysts suggest that a complete closure of both the Strait of Hormuz and Bab el-Mandeb could disrupt up to 25% of the world's oil and gas supply. The situation underscores the fragility of global energy markets amid ongoing geopolitical conflicts.
