The Houthis have escalated tensions by threatening attacks on Saudi oil infrastructure, including vessels and the Yanbu pipeline, raising alarms over possible supply disruptions. Following their declaration of a maritime embargo against Saudi Arabia, warnings emerged that ships in Saudi ports could be targeted. In response, some Saudi-linked tankers are reportedly rerouting, and there are unconfirmed reports of strikes on two Saudi oil tankers in the Red Sea.
These moves come as the Bab al-Mandab strait remains a critical chokepoint for Saudi oil exports, making the situation particularly sensitive. Market reactions have been swift: the probability of West Texas Intermediate (WTI) crude hitting $100 in July surged to 40.7%, up from 16% just a day earlier. Similarly, chances of reaching $95 jumped to 68.5%, underscoring the market’s concern about supply interruptions.
The growing risk perceived by traders highlights how geopolitical tensions around energy routes can quickly influence price expectations. Observers are closely monitoring developments around the Bab al-Mandab passage and the Houthis’ next moves. The actions of influential players like OPEC+, the US government, and maritime security agencies will be key in shaping future price dynamics and the stability of Saudi oil shipments.
