Hormuz Slowdown Raises Risk of Triple-Digit Oil Prices
Oil markets are facing renewed supply risks after Houthi militants in Yemen announced an immediate maritime embargo against Saudi Arabia. The declaration raises the possibility of disruption at the Bab el-Mandeb Strait, a major shipping route connecting the Red Sea, Gulf of Aden and international markets. Analysts at Energy Aspects warn that a slowdown involving both Bab el-Mandeb and the Strait of Hormuz could push oil prices above $100 per barrel, even as current trading suggests investors remain relatively calm.
The Houthis accused Saudi Arabia of imposing an “aggressive siege” and linked the move to an alleged Saudi strike on Sanaa International Airport. They have repeatedly threatened to close Bab el-Mandeb during the U.S.-Iran war. Such a closure could restrict Saudi oil exports that have been redirected through a pipeline to a Red Sea terminal, a route that has provided an alternative while tanker movements through Hormuz have declined.
Despite the threat, crude prices showed only a limited reaction. Brent briefly rose nearly 4% and moved above $90 per barrel after reports that at least three U.S. service members had died in recent fighting. Prices later eased when Iran indicated that negotiations with Washington remained possible.
The broader conflict has intensified following the collapse of a June 17 interim agreement to reopen Hormuz. Iran has carried out repeated tanker attacks, killing at least two seafarers and injuring more than a dozen in July. The United States has responded with nine consecutive days of bombing and a renewed naval blockade, while Iran has fired missiles at U.S. allies in the Gulf.
The Trump administration maintains that Hormuz remains open, with millions of barrels shipped daily under U.S. military protection. However, reduced tanker traffic and threats to a second chokepoint leave global supplies vulnerable to further disruption and potentially sharper price increases.