Houthi attacks push Brent past $100 as Red Sea blockade widens

Houthi attacks on Saudi oil tankers pushed Brent past $100, reopening a geopolitical risk premium that tests inflation forecasts and Bitcoin's safe-haven narrative.

Houthi rebels struck two Saudi oil tankers in the Red Sea and targeted Aramco facilities in Jizan and Yanbu, pushing Brent crude past $100 a barrel for the first time since May and reigniting supply-disruption fears across the Middle East.

"The Houthis have effectively weaponized the Bab el-Mandeb Strait, and Saudi Arabia's retaliatory airstrikes signal this is no longer a contained skirmish," said Elena Fischer, geopolitical risk analyst at Edgen. "The risk premium in oil could persist as long as both sides maintain their current posture."

Brent crude touched $101 a barrel Thursday before settling back near $96 on Friday, according to exchange data. The Houthis struck the Saudi-flagged tanker NCC Masa, causing minor hull damage, and later launched drone and missile attacks on Aramco facilities in Jizan and Yanbu. Saudi Arabia responded with airstrikes on Houthi military sites in Yemen's Hodeidah province, wounding two people, according to Houthi-affiliated broadcaster Al Masirah. Only 49 vessels transited the Bab el-Mandeb Strait on Thursday, down from pre-crisis averages, while traffic through the Strait of Hormuz fell to just six ships, Kpler data show.

The Bab el-Mandeb Strait handles about 10% of global seaborne oil trade, and the Strait of Hormuz about 21%. A sustained blockade at either chokepoint risks pushing gasoline prices higher — the U.S. national average already stands at $4.11 a gallon, up from $3.16 a year ago, according to AAA. For Bitcoin, which traded near $64,000 during the escalation, the episode tests whether the digital asset can decouple from risk assets during a supply-driven oil shock and strengthen its store-of-value thesis.

Escalation from blockade to airstrikes

The confrontation escalated rapidly this week. The Houthis declared a full maritime blockade against Saudi Arabia on Monday, July 20, after accusing the kingdom of a bombing at Sanaa airport. By Wednesday, the group had struck two Saudi oil tankers in the Red Sea. Saudi Arabia's General Authority of Civil Aviation confirmed the NCC Masa sustained hull damage. On Friday, the Saudi-led Arab coalition launched what it called a "proportional military response operation" targeting Houthi military sites in Hodeidah. The Houthis retaliated hours later with missile and drone strikes on Aramco facilities in Jizan and Yanbu.

Two-front supply risk tests market pricing

The last time a similar blockade threat emerged in the Bab el-Mandeb during the 2023-2024 Houthi campaign against Red Sea shipping, Brent crude remained range-bound between $75 and $85 as container traffic was rerouted around the Cape of Good Hope. This time, the simultaneous closure of the Strait of Hormuz — where Iran has stopped vessels using a U.S.-sanctioned southern route — creates a two-front supply risk that oil markets have not priced since the 2019 Abqaiq-Khurais attacks, which knocked out 5.7 million barrels a day of Saudi production and sent crude spiking 15% in a single session.

Diplomatic efforts have so far failed to de-escalate. Iran's Foreign Minister Abbas Araghchi said there was "no military solution" to the Yemen conflict, while Pakistan's Foreign Minister Ishaq Dar spoke to his Saudi counterpart in an attempt to mediate. The Houthis have said their blockade targets only Saudi vessels, and two supertankers carrying Saudi oil passed through the Bab el-Mandeb on Thursday after changing their listed ownership to Chinese entities, according to Kpler data. Whether this workaround holds depends on the Houthis' ability to verify vessel ownership — and on whether Saudi Arabia escalates its military response.

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