The Gas King made a U-turn to head north into the Red Sea toward the Suez Canal. Bab el-Mandeb is in the south. (Bloomberg)
key takeaways:
- Houthi threats against Saudi-linked shipping in the Bab al-Mandeb strait have prompted tankers and other ships to divert, stop or reroute through the Suez Canal.
- The disruption added pressure to oil markets already strained by US-Iran hostilities, with Brent crude rising above $95 a barrel and freight costs expected to rise.
- Shipping companies are reevaluating Red Sea transits as Navy officials warn of the risk of attack and limited escort capacity while some ships are diverting.
Ships continue to move away from the southern end of the Red Sea after Yemen’s Iran-backed Houthi rebels announced a ban on Saudi exports through the Bab al-Mandeb strait, a narrow channel that has become a lifeline for oil exports since the start of the US-Israeli war with Iran.
Tracking data shows two Asia-bound ships are heading north toward the Suez Canal — a diversion that could add 30 days of sailing time in some cases — while others have put their voyages on hold. No crude oil tankers have been seen transiting the Bab al-Mandeb since the Houthis emailed shipowners earlier this week asking them not to cross, although it is possible some may have done so with their transponders turned off.
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The disruption to traffic through the Red Sea will weigh on global oil markets, which have been hit by renewed hostilities in the Gulf and the effective collapse of a ceasefire between the US and Iran. Brent futures have already risen more than 30% this month and crossed $95 a barrel.
At the port of Yanbu, the main conduit through which Saudi Arabia is able to continue to export its oil, only two of the seven berths used to export oil were occupied on July 22, according to tracking data – although the EU naval force in the Red Sea has advised merchant ships to turn off their transponders if they call at ports in the kingdom.
“The Middle East risks becoming a two-chokepoint problem,” wrote Standard Chartered analysts including Emily Ashford. “The cost of transporting barrels is likely to increase if the threat continues.”
The Gas King was seen making a U-turn north of the Red Sea to head towards the Suez Canal. Bab el-Mandeb is in the south.
To keep its oil flowing to the market, Saudi Arabia has shipped barrels from across the country to its west coast and global markets. In the days before the Houthi threat, the kingdom exported record amounts of crude from its terminals on the Red Sea, shipping 5.9 million barrels a day from two terminals in Yanbu in the week to July 17, according to tanker tracking compiled by Bloomberg.
The Houthis’ announcement of sanctions threatens that flow. Militants had previously attacked merchant ships in the southern Red Sea, forcing ships to divert around the area. However, according to the EU, the group has not attacked any ships since September last year.
On July 21, oil tanker industry officials said shipping companies had become more cautious about calling at a Saudi Red Sea port, although it was too early to say whether this would impact chartering fees and, importantly, loading.
The first Red Sea bends emerged
according to #sea transportation According to the data, the first operational responses to increased security risks in the Red Sea are now visible. Two tankers loaded with crude oil, Singapore-flagged XIN LONG YANG and Liberia-flagged RODOS, have changed their plans… pic.twitter.com/TDAnltqzek
– MarineTraffic (@MarineTraffic) 21 July 2026
The European Union has advised merchant ships belonging to Saudi Arabia and the US to avoid passing near Yemen.
As in the Strait of Hormuz, ships attempting to conceal their positions to avoid attack make it difficult to accurately track activities in the area. However, there are signs that ships sailing from the Indian Ocean to the Gulf of Aden are pausing their journeys as owners assess whether to transit. At least six crude tankers destined to load crude oil at Yanbu have turned back or stopped in the Arabian Sea, near the eastern approach to the Bab el-Mandeb strait, vessel tracking data shows.
On July 21, the Greek-owned Suezmax, the Amazon, which departed from Yanbu with more than 1 million barrels of crude oil, changed its destination to the Suez Canal. Shipping fixtures show that the tanker is to deliver its cargo to India. It is owned by Dynacom Tankers Management, one of the owners sailing in the Persian Gulf at the start of the Iran War, but several of its ships have crashed in both the Strait of Hormuz and the Black Sea in recent times.
Dynacom did not immediately respond to a request for comment.
Tracking data shows that ships carrying liquefied petroleum gas and crude oil in various quantities have also either taken U-turns or halted their voyages.
One ship, the Xin Long Yang, has returned to its original route after previously heading north, and is now heading towards Bab el-Mandeb.
“The escalating violence between the US and Iran now also threatens the few Middle Eastern crude barrels that are able to bypass Hormuz,” wrote Brammer analysts including Henry Cura. “Unless the chaos in the Middle East can be resolved quickly, we are likely to see the re-emergence of our ‘instant premium’ for freight.”
The Houthi terrorist group in Yemen is poised to attack shipping near the Bab al-Mandeb strait at the southern end of the Red Sea, according to the Joint Maritime Information Centre, the global monitoring body for naval security.
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The EU’s naval mission in the Red Sea provides escort for civilian ships in the area, but has warned it has limited assets and ships seeking protection could face waiting times.
Unlike the Persian Gulf, the Red Sea has an escape route to the north via the Suez Canal, but that means significant additional sailing time and shipping costs for companies looking to move oil to Asia.
“It’s a cacophony of bad news at the moment,” said Sasha Foss, analyst at CSC Commodities, a division of Marex Group. “I hope the longer the strait remains closed the better things will get, because we no longer have the buffers.”
Written by Weilun Soon, Grant Smith, Nicholas Lua, Julian Lee and Alex Longley
