Houthi Attacks on Saudi Oil Tankers in Red Sea Threaten Global Oil Supply and India's Imports

Oil prices surged above $100 a barrel on Thursday (July 23, 2026), the highest in nearly two months, after Yemen's Houthi rebels claimed attacks on two Saudi oil tankers in the Red Sea. The strikes are part of what the Houthis describe as a 'naval blockade' on Saudi Arabia, threatening a vital chokepoint in global oil trade: the Bab el-Mandeb strait.

According to Al Masirah, the Houthi-run television channel, the tankers Encelia and Layla were hit early Thursday near the Saudi port of Jizan. The Saudi Press Agency confirmed that Encelia was struck but said the attack on Layla remained unconfirmed. Reports indicate the Houthis used drones and missiles in the assault. Encelia sent out a distress signal after being hit by a missile.

The Bab el-Mandeb, connecting the Red Sea to the Gulf of Aden, is a critical passage for oil shipments, especially after the Strait of Hormuz was shut earlier this year. The Houthis, who are backed by Iran and control territory near the strait, have been seen as a potential tool for Tehran to disrupt shipping and gain leverage in negotiations with the United States.

In early March, Saudi Arabia began diverting crude oil from the Strait of Hormuz to its Yanbu port on the Red Sea via a 1,200-km pipeline. However, the easiest route from Yanbu to Asian markets passes through the Bab el-Mandeb. The alternative—sailing north through the Suez Canal and around the Cape of Good Hope—adds weeks of travel and significantly higher costs.

According to Reuters, Iran has flown gold, Islamic Revolutionary Guard Corps (IRGC) commanders, military advisers, and missile- and drone-related equipment into Yemen this month, indicating a desire to strengthen the Houthis' ability to threaten Red Sea shipping. The report said IRGC commanders are there to support Houthi operations and provide training on new missile systems.

The disruption is already affecting shipping. On Tuesday (July 21, 2026), two oil tankers—Xin Long Yang, carrying 2 million barrels of Saudi oil to China, and Rodos, carrying 700,000 barrels to India—changed course in the Red Sea after the Houthi blockade announcement. Data from Kpler, cited by Al Jazeera, showed 12 vessels loaded with crude from Yanbu remained in the Red Sea, while two others turned off their automatic identification system transponders near Bab el-Mandeb. Incoming empty tankers also showed signs of hesitation.

For India, the blockade poses a serious risk. More than 50% of India's crude oil imports transit through the Bab el-Mandeb, according to trade data. India imports just over 5 million barrels of crude per day; in June, 53.5% came from Russia via the Suez Canal and then through the Bab el-Mandeb. With the Strait of Hormuz already shut, any further disruption in the Red Sea will severely hit India's oil imports and inflate its import bill as global crude prices rise.

The Houthis have previously granted safe passage to Russian and Chinese oil tankers. In March, the U.S. Office of Foreign Assets Control, while announcing sanctions against Houthi leaders, said that Supreme Political Council member Mohamed Ali Al-Houthi had communicated with officials from those countries to ensure safe transit. This selective approach adds another layer of complexity to the geopolitical dynamics in the region.