Houthi Threats to Saudi Oil Disrupt Global Markets

By David Okafor

Yemen's Iran-backed Houthi movement declared a maritime embargo on Saudi Arabia on July 20, 2026, escalating tensions in the region and threatening vital oil shipments. This move comes as a response to Saudi actions in Yemen, framed by the Houthis as an 'eye for an eye' retaliation, according to reports from AP News.

As a result of the embargo, Saudi Arabia's crude loadings from Red Sea ports have plummeted by 36%, falling from 9.5 million barrels per day (bpd) on June 29 to 6.1 million bpd by the week of July 13, based on data from Kpler. The Bab el-Mandeb Strait, a critical chokepoint for global trade, carries 12% of the world's trade, and its closure could jeopardize a quarter of global oil and gas supplies.

In response to these developments, oil prices initially surged, with Brent crude reaching $90 to $100 per barrel earlier in July. However, recent optimism regarding potential U.S.-Iran negotiations has tempered these prices, with Brent crude trading near $87.93 per barrel as of mid-July.

The International Energy Agency (IEA) reported a rebound in global oil output to 98.8 million bpd in June, although this remains 9.4 million bpd below pre-war levels. The IEA projects 2026 output at 102.6 million bpd, contingent upon de-escalation in the region.