Two tankers carrying Saudi crude to China & India make U-turns in the Red Sea, as the Houthis declare a blockade of Saudi Arabia.

Two oil tankers loaded with Saudi crude and bound for China and India turned back in the Red Sea on Tuesday after Yemen's Houthi rebels declared a sweeping maritime blockade against Saudi Arabia, shipping data from LSEG showed.

One of the vessels, the VLCC Xin Long Yang, departed the port of Yanbu on July 20 carrying roughly 2 million barrels of crude destined for China, but came to a halt before reaching the Yemeni border and was last seen heading north. According to maritime data from LSEG, both vessels altered their routes toward the Suez Canal following the Houthi advisory.

Blockade Declared "Effective Immediately"

Houthi militants declared the maritime embargo against Saudi Arabia effective immediately, threatening to worsen the oil supply disruption already triggered by Iran's attacks on tankers in the Strait of Hormuz. In an email sent to shipping companies, the group warned that firms should not load or discharge cargo at Saudi ports, and that violations could result in vessels being targeted "in any location" within the operational reach of Yemen's armed forces.

Houthi military spokesperson Yahya Saree framed the move as retaliation for a "continued Saudi siege" on Yemen, warning that any Saudi response would be met with "a total and harsh escalation." The escalation follows last week's incident in which the Houthis accused Saudi Arabia of bombing Sanaa International Airport to prevent an Iranian plane carrying Houthi leadership from landing after Ayatollah Ali Khamenei's funeral. Although the plane landed safely at another Yemeni airport, the group retaliated with missile and drone strikes on Saudi Arabia's Abha International Airport.

A Pincer on Saudi Oil Exports

Since the Iran war effectively stalled traffic through the Strait of Hormuz, Riyadh had been relying on a pipeline to the Red Sea to export millions of barrels of oil. With the Strait of Hormuz already at roughly 89 percent interdiction under Iranian naval enforcement, Saudi Arabia had spent the past four months rerouting crude exports westward through the East-West Pipeline to its Red Sea terminal at Yanbu. That bypass now sits inside the declared blockade zone, leaving the kingdom facing simultaneous maritime interdiction on both flanks for the first time in its history.

Total petroleum volumes transiting the Bab al-Mandeb were 7.4 million barrels per day in June, or about 7 percent of global oil output, according to Kpler data. It remains unclear whether the Houthis can effectively execute a full blockade, but even the threat alone could be enough to deter shipping companies and insurers from authorizing vessel transits. Insurance costs for shipping goods rose on Monday following the announcement, insurance industry sources told Reuters.

Disrupting transit through the Bab al-Mandeb forces shipping firms to route vessels around the Cape of Good Hope off South Africa, adding approximately 2,700 miles to the journey from Saudi Arabia to the United States alone.

Sources:
CNBC: Iran's Houthi allies declare maritime embargo against Saudi Arabia
Al Jazeera: Yemen's Houthis declare naval blockade of Saudi Arabia
Supply Chain Brain: Chinese Oil Tanker U-Turns in Red Sea After Houthi Attack Threat