Oil Jumps 3% on Houthi Blockade Threat to Saudi Crude via Red Sea

Oil prices surged to a five-week high on Tuesday as the Houthi militia’s announced naval blockade of Saudi Arabia triggered immediate disruptions to crude shipments and heightened fears of a wider Middle East supply crisis.

Brent crude futures rose $1.79, or 2%, to settle at $91.01 a barrel, according to sources. The international benchmark briefly traded close to $92 during the session, as reported by NDTV Profit. US West Texas Intermediate crude gained $1.68, or 2%, to settle at $84.91. That marked the highest close for Brent since June 10 and for WTI since June 11. Brent remained in technically overbought territory for a seventh consecutive day, the first such stretch since June 2025.

The immediate trigger was the Houthis’ declaration on Monday of a naval blockade on Saudi Arabia, expanding a conflict that already involved direct US-Iran strikes. Two oil tankers carrying Saudi crude bound for China and India reversed course in the Red Sea on Tuesday after the Houthis warned shipping companies against loading or unloading cargo at Saudi ports, according to sources. The Houthis said vessels involved in such operations could be targeted “in any location,” as reported by NDTV Profit. Shipping data from LSEG showed the two tankers, which had loaded crude this week, made U-turns and were headed toward the Suez Canal. However, Saudi Arabia’s Red Sea port of Yanbu was operating normally, sources said.

The Bab el-Mandeb Strait, a critical chokepoint linking the Red Sea to the Gulf of Aden, is partially controlled by the Houthis. Saudi Arabia relies on its Red Sea export hub at Yanbu to route millions of barrels of crude to Asian markets while avoiding the Strait of Hormuz.

“The rally is not necessarily about lost barrels today, but rather the market assigning a higher probability that logistics remain unstable through the week, especially if Saudi exports to Asia or Red Sea transit face additional disruption,” analysts at consulting firm Gelber & Associates said in a note cited by multiple sources.

The moves came amid an escalating military confrontation between the US and Iran. US forces bombed targets in the south and west of Iran overnight, while Tehran targeted US sites in Bahrain, Kuwait and Jordan, and at least one tanker was hit in the Strait of Hormuz, sources reported.

Additional supply-side pressure emerged from the Black Sea. The Caspian Pipeline Consortium (CPC) has stopped receiving oil from Kazakhstan after suspending loadings on Monday due to attacks on oil tankers at its Black Sea terminal, three industry sources said. Russia has accused Ukraine of targeting CPC tankers; Ukraine has not commented on the attacks.

Fundamentals also pointed to tightening supply. Crude oil exports from Saudi Arabia fell for a third straight month in May to a record low, data from the Joint Organizations Data Initiative showed Tuesday.

The oil market was awaiting weekly US storage reports from the American Petroleum Institute trade group later Tuesday and the US Energy Information Administration on Wednesday. Analysts estimated energy firms pulled 0.5 million barrels of crude from storage during the week ended July 17. If correct, that would be the second consecutive weekly decline, compared with a decrease of 3.2 million barrels in the same week last year and an average decline of 1.2 million barrels over the past five years (2021 to 2025).

The Saudi-led coalition condemned the Houthi blockade as a violation of international law and an act of maritime piracy, and said it had initiated protection measures for commercial vessels transiting the Bab el-Mandeb, according to NDTV Profit. Analysts cited by the outlet warned that even if attacks on commercial shipping do not materialize, the threat alone could disrupt tanker movements, increase freight and insurance costs, and tighten global oil supplies.

For India, which imports more than 85% of its crude oil needs, sustained gains in Brent prices could inflate the country’s import bill, fuel domestic inflation and add pressure on government finances if elevated prices persist, NDTV Profit reported.