Tankers with Saudi crude turn back as Houthis open new front in US-Iran war

The Houthis Shut the Back Door

For months, Saudi Arabia had partially insulated itself from the closure of the Strait of Hormuz by piping oil across the kingdom to the Red Sea port of Yanbu, then loading tankers bound for Asia. That workaround kept millions of barrels per day flowing even as the Persian Gulf became a combat zone. The Houthi announcement of a naval blockade on Saudi Arabia, and the immediate U-turn of two tankers loaded at Yanbu, signals that this escape route is now also under threat. With both chokepoints — Hormuz at the Gulf exit and Bab el-Mandeb at the Red Sea mouth — effectively contested, the bulk of Saudi crude has nowhere easy to go.

President Trump told reporters the Houthis had not yet physically closed the Bab el-Mandeb strait, dismissing the blockade as rhetorical so far, but tanker captains are not waiting to find out. The commercial calculus has already shifted: the risk premium for transiting a war zone now exceeds the cost savings of the Red Sea route. According to the report, both affected tankers were bound for China and India, the two largest Asian buyers of Saudi crude, underscoring how quickly the disruption cascades into global energy markets.

A War That Spills Across the Region

The conflict, which the article dates to February 28 with US and Israeli attacks on Iran, has metastasized far beyond the original combatants. Iran struck US military sites in Bahrain, Kuwait, and Jordan, and reportedly hit Amazon infrastructure in Bahrain. The IRGC said two oil tankers caught fire in the Strait of Hormuz's southern shipping lane, and the UKMTO reported a tanker struck by a projectile whose crew abandoned ship. Kuwait reported drone and missile attacks on power plants that also produce fresh water — a particularly grim detail for desert states that already depend on desalination.

The human and financial toll is mounting. A health ministry official said 50 Iranian civilians have been killed and 500 wounded in US strikes. Defense Secretary Pete Hegseth told senators the war has cost $37.5 billion so far and is being fought without congressional authorization, requesting another $70 billion in supplemental funds. Trump confirmed 18 US service members have been killed. The war is, as the article notes, deeply unpopular at home — a factor that may shape how aggressively the administration escalates against the Houthis or Iran.

Oil Markets and the Ceasefire Lifeline

Brent crude climbed above $91 a barrel and US gasoline topped $4 a gallon on Tuesday, a more than 2% gain that reflects traders pricing in a genuine supply shock rather than mere rhetoric. A senior Iranian official told Reuters that Tehran received a mediator's proposal for a 10-day ceasefire aimed at salvaging the interim agreement signed in June, which itself replaced an earlier April ceasefire. The article is truncated before the details, but the signal is clear: both sides are probing for off-ramps even as the fighting widens.

For energy-importing economies, the math is unforgiving. A full closure of the Red Sea alternative would trap most Saudi exports and force Asian and European buyers to compete for whatever Gulf crude can still move, bidding up prices further. Each additional week of war adds billions in military costs, billions more in oil-supply premiums, and an unknown but growing casualty count. The mediator's 10-day proposal, if accepted, would buy time — but only if both Washington and Tehran decide the political cost of continued fighting now exceeds the cost of stopping.