Following threats from Houthi rebels in Yemen to target vessels heading to or from Saudi ports, several oil tankers have made U-turns in the southern Red Sea. One prominent example is the very large crude carrier Xin Long Yang, which departed from Yanbu with approximately 2 million barrels of Saudi crude destined for China. After reaching near the Yemeni border, it halted and reversed course, heading north instead of proceeding through the Bab al-Mandab Strait.
This disruption follows an email sent by the Houthis to shipowners, banning vessels from loading or discharging cargo at any Saudi ports and threatening targeting "in any location within the operational reach." The Red Sea has become a critical route for Saudi oil exports since the effective closure of the Strait of Hormuz due to the US-Israeli war with Iran. Saudi Arabia has been diverting over 70% of its crude exports through an east-west pipeline to the Red Sea port of Yanbu, with approximately 4 million barrels per day shipped in recent weeks, a significant increase from 973,000 barrels a year prior.
The U-turns by vessels like the Rodos, an Aframax tanker carrying about 700,000 barrels for India, highlight the immediate impact of the Houthi threats. Instead of continuing their original voyages, these tankers are opting for much longer routes, potentially via the Suez Canal and around the southern tip of Africa. This rerouting could add weeks to shipment times and significantly increase freight rates and consumer energy costs. Analysts predict that while the immediate impact on consumers might not be severe, sustained disruptions could lead to higher prices globally.
The Houthis' declaration of a naval blockade against Saudi Arabia has heightened concerns about global energy supplies, with oil prices already seeing increases. Brent crude rose more than 2% to over $91 a barrel, and US gasoline prices surpassed $4 a gallon. The European Union's naval force in the region, Aspides, has recommended that merchant vessels with Israeli, US, or Saudi interests avoid transiting the Red Sea and Gulf of Aden until the threat level subsides. This situation underscores the vulnerability of global energy systems to geopolitical conflicts in key maritime chokepoints like the Red Sea and the Bab al-Mandab Strait, through which nearly 15% of global sea trade passes.
