Houthis declare naval blockade on Saudi Arabia

Yemen’s Houthis declared a naval blockade on Saudi Arabia yesterday, effective immediately. Military spokesperson Yahya Saree named the Kingdom directly, framing the move as an “eye for an eye” response to what the Houthis call a Saudi siege on Yemen.

The corridor in question is the Bab Al Mandeb Strait at the southern mouth of the Red Sea. Some 12% of world trade and a quarter of container traffic bound for Suez pass through the 32-km-wide waterway. That is the part that matters for Riyadh, as the blockade is aimed squarely at the Kingdom’s escape hatch for its oil, unlike the group's 2023-2025 Red Sea campaign which mostly hit Israel-linked vessels.

Escape hatch? Iranian attacks effectively shut the Strait of Hormuz in late February, and the Kingdom’s entire contingency has been to pump crude overland to the west. Aramco pushed its East-West pipeline to a record 7 mn bpd — converting parallel NGL lines to crude service to get there — sending as much as 5 mn bpd for export through the Red Sea port of Yanbu. Loadings at Yanbu climbed from about 1.1 mn bpd in February to more than 4 mn bpd by March. That western route is the relief valve that has kept Saudi barrels, and a chunk of global supply, reaching market while the Gulf coast sat blocked.

Why it matters: For the first time in the Iran war, both of Saudi’s saltwater exits are threatened at once. Hormuz to the east is still near a standstill, and now Bab Al Mandeb to the west is under a declared blockade.

Dire straits: A full closure of Bab Al Mandeb could remove some 7% of global oil supply on top of the roughly 10% the war has already taken out — and it strips away the redundancy that let Riyadh reroute in the first place. The Kingdom has no third corridor of comparable scale, and our ability to continue shipping oil is cited by almost all pundits as what is going to save us from contraction and a severe economic slump this year. Kuwait, Qatar, and Iraq have no alternatives to Hormuz at all.

The cargo hit would be just as real. A full closure would badly disrupt Red Sea freight — and Saudi is doubly exposed because the Hormuz shutdown has already funnelled much of the Kingdom’s seaborne cargo into the Red Sea, Vespucci Maritime CEO Lars Jensen tells EnterpriseAM. The only fallback is to route around Africa, “severely impacting capacity available,” particularly for the niche carriers still working the lane, Jensen says.

BUT- That remains a big if: Omar El Shenety, managing partner at Zilla Capital and head of the Financial Markets Unit at ECES, sees the announcement as leverage rather than an actual shutdown. “I am not sure how effective this blockade will be. Most likely it will be a symbolic action to pressure Saudi Arabia and other Gulf countries to help in ending the current war,” he tells EnterpriseAM.

Still, declaring a blockade is not nothing. The news alone reportedly spiked war risk premiums for ships to some 0.75% of a vessel’s value yesterday, up from last Friday’s figure of about 0.3%, Reuters reports, citing unnamed sources.

Not known for accuracy: Saudi-linked ships and those visiting Red Sea ports face a high risk of attack due to mistaken identity. Maritime security firm Ambrey noted this risk stems from how the Houthis acted during the 2024 Red Sea crisis, where they frequently targeted vessels based on outdated company data.

Riyadh’s response? The Saudi Foreign Ministry condemned Saree’s announcement, denying the claim that the Kingdom has laid siege on its southern neighbor, SPA reports. In a statement, the ministry said that it actively supported Yemen through financial aid, energy supplies, and massive humanitarian shipping inflows.