Oil prices surged to $99 a barrel following Houthi attacks on two Saudi Arabian oil tankers in the Bab el-Mandeb Strait. This escalation in the Red Sea, a critical chokepoint for global shipping, marked the highest oil price since May and raised concerns about world energy supplies and inflation. The Houthis claimed responsibility for missile strikes that caused fires in the Saudi city of Jizan and vowed further retaliation after Saudi Arabia launched airstrikes on Houthi targets in the Yemeni port city of Hodeida and a nearby island.
Saudi Arabia responded to the attacks by striking Houthi targets, describing their operations as a "proportionate response." Although the Saudi Coalition Joint Forces Command stated that the port of Hodeidah itself was not targeted, Houthi-affiliated television reported injuries to a worker in Hodeidah. The Houthis had also previously announced a naval blockade targeting Saudi Arabia, prompting the kingdom to divert millions of barrels of oil daily via pipelines to the Red Sea to avoid Iran's near-total blockade of the Strait of Hormuz.
The attacks have heightened tensions around key maritime chokepoints, including the Bab el-Mandeb Strait, through which approximately 12 percent of the world's trade passes, and the Strait of Hormuz. Shipping insurance costs for routes through the southern Red Sea reportedly doubled for some companies. While two Chinese-chartered supertankers successfully navigated the Bab el-Mandeb, the overall threat to shipping and global energy infrastructure remains significant. International oil prices had previously dropped to just over $96, but quickly rebounded following these events.
