Yemen's 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.

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.

The route that matters: The corridor in question is Bab Al Mandab 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 its 32-km neck. That is the part that matters for Riyadh, as the blockade is aimed squarely at the Kingdom’s escape hatch, unlike the group’s 2023-2025 Red Sea campaign which mostly hit Israel-linked vessels.

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.

Not the same fight as before: Targeting Saudi traffic “is different: it targets a top global supplier and the route designed to reduce reliance on Hormuz," former head of supply chain and transport industries at the World Economic Forum Wolfgang Lehmacher tells EnterpriseAM. a shift that gives the Houthis “more leverage over oil and gas flows, not just container trades.”

“A complete closure would severely impact Red Sea cargo — especially a problem for Saudi Arabia, as the closure of Hormuz leads to diverting quite a bit of Saudi cargo away from the [Arabian] Gulf into the Red Sea. The only option would be to go around Africa also for niche carriers, severely impacting capacity available,” Vespucci Maritime’s Lars Jensen tells EnterpriseAM.

Dire straits: A full closure of Bab Al Mandab could remove roughly 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 overland corridor of comparable scale. Kuwait, Qatar, and Iraq have none at all.

That’s a big if, though. Omar El Shenety, managing partner at Zilla Capital and head of the financial markets unit at ECES, sees the announcement as leverage rather than a live 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. Just the threat can lift war-risk ins. premiums and inject fresh uncertainty into Saudi port calls.

IN CONTEXT- Iranian attacks effectively shut 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 bbl / d — converting parallel NGL lines to crude service to get there — sending as much as 5 mn bbl / d for export through the Red Sea port of Yanbu. Loadings at Yanbu climbed from about 1.1 mn bbl / d in February to more than 4 mn bbl / d by March. That western route is the relief valve that has kept Saudi barrels, and a chunk of global supply, reaching the market while the Gulf coast sat blocked.