Weekly Intelligence Brief #01 Iran,Houthis,and Saudi Exports:The Twin Chokepoint Challenge
Weekly Intelligence Brief #01
Iran,Houthis,and Saudi Exports:The Twin Chokepoint Challenge
Date: 23/07/2026
Risk Level: High
BLUF:
Saudi Arabia’s primary contingency plan to bypass the Strait of Hormuz is under increasing pressure following the Houthis announced blockade of Saudi linked-shipping through Bab el-Mandeb Strait.
The resumed conflict between Saudi Arabia and Houthis in Yemen this time has serious consequences for whole world as Houthis announced blockade of Saudi and they have significant capability to threaten commercial shipping in Bab el-Mandeb Strait in the Red Sea through which Saudi now exports a significant share of crude oil following the closure of Strait of Hormuz due to Iran-United States conflict.
This blockade places Saudi Arabia’s primary alternative export corridor to Strait of Hormuz under significant pressure.
Already global prices of crude oil are on rise due to closure of Strait Hormuz,now with this blockade prices are likely to rise further as Saudi is a leading exporter.And this will have significant consequences for global economy,food security,and industries dependent on petrochemicals.
Key Developments:
On July 13 2026 Saudi led coalition struck Sanaa International Airport in order to prevent a flight from Iran landing in Yemen.The Houthis citing damage to civilian infrastructure on the same day i.e on July 13 2026 retaliated by launching missiles and drones against Abha International Airport in southern Saudi Arabia.
The Houthis then escalated further by announcing naval blockade on Saudi Arabia on 20 July 2026.They said ships linked to Saudi ports would be barred from transiting through Bab el-Mandeb Strait.The group described the move as an “eye for an eye” response to the decade-long Saudi-led coalition blockade of Yemen.
On July 21 2026 24hours after Houthis announced blockade,5 oil tankers carrying Saudi crude had made a u-turn at Bab el-Mandeb Strait.This indicates Houthi warnings may already be influencing commercial shipping decisions .
And on 22 July 2026 two oil tankers named ENCELIA and LAYLIA from Saudi Arabia were attacked by Houthis using missiles and drones while trying to cross Bab el-Mandeb strait.
President Trump said that the United States would ensure freedom of navigation through the Red Sea and warned Iran and its proxies that the US would attack infrastructure in Iran for any attack on commercial shipping.
Assessment:
Saudi Arabia’s oil reserves are concentrated in the eastern part of the country,as it is closer to Strait of Hormuz exports are carried out via this route.But due to conflict in West Asia and closure of Hormuz,Saudi used its strategic East-West pipeline which is 1200km long and called petroline,by which oil is transported from eastern part of the country to western part and reaches port of Yanbu which is on Red sea.From here oil moves from Bab el-Mandeb Strait into Indian ocean and moves to Asia and Europe via Cape of Good Hope.
Saudi cannot avoid Bab el-Mandeb Strait because very large crude carriers (VLCC’s) cannot transit through the Suez canal in full capacity as it is not deep enough and need to depend on SUMEED pipeline for discharge of oil in Red sea and pass through canal with a lighter load and reload the oil on Mediterranean side.The whole process takes time and costs significantly.
Before the start of conflict Saudi Arabia used to transport approximately 2.8 million barrels of oil per day (bpd) using East-West pipeline now it transports 7 million barrels per day which is its maximum capacity and avoids Hormuz to export this.
But now due to the Houthis blockade and threat they pose to ships,the export of oil from Saudi via Red sea from the East-West pipeline i.e. approximately 7million barrels per day are at risk.Through Bab el-Mandeb Strait now approximately 7% of global crude moves.
While the Strait of Hormuz remains closed because of renewed Iran-US conflict,now with Houthis coming into the picture by blockade of Saudi Arabia in Bab el-Mandeb Strait the global energy trade is it a significant risk and price of a barrel of crude can increase significantly which is unsustainable for many countries in global south.
Business and Strategic Implications:
1.Energy Markets:
Houthis blockade on Saudi Arabia will lead to significant reduction in export capabilities of Saudi’s crude.Being one of the largest exporters of crude oil this causes global oil price to rise significantly and have substantial effect as already price is risen due to Hormuz closure.
2.Shipping and Insurance costs:
Higher war-risk premiums and freight costs are likely to increase transportation expenses for energy importers via the Red sea route due to the threat posed by Houthis.This affects global trade and increases costs.And oil tankers (VLCC’s) are likely to avoid this route if threat persists.
3.Petrochemicals and Fertilizers:
Apart from oil Saudi Arabia is also one of the largest exporters of petrochemicals,polymers,and fertilizers.Now because of Houthis blockade there is a threat to exports of these too and it can lead to increase in global prices of these materials as their supply is disrupted.And have cascading effects on plastic industry,global food production etc.
4.Importing Countries:
Traditionally Asian countries like China,India,Japan,and ASEAN countries depend on Saudi for their energy imports but now with Saudi crude gone they will need to buy crude from other sources where prices increase due to competition and these countries need to pay more for transportation as distance increases.
5.Competitors:
Higher oil prices could improve export revenues for alternative suppliers such as the United States and Russia, provided they have sufficient production and export capacity.
What to Watch:
Houthis operational activity:Any further drone or missile attacks targeting commercial shipping vessels in the Red sea and Bab el-Mandeb Strait.
Iranian naval activity and support to Houthis:In the worst case scenario Iran can join Houthis in enforcing blockade on Saudi Arabia and even attack ships in the Red sea.
United States naval deployment and response:US may launch widespread attacks on Houthis and on Iran to safeguard or open commercial shipping lanes.
War-risk insurance premiums:The insurance premiums are likely to increase if attacks on commercial shipping continue while transiting from Saudi via Bab el-Mandeb Strait.
Brent crude price movements:If this blockade ensures Saudi crude is removed from the global crude market then oil prices will increase and will have an effect on all countries.
Sources:
4.https://www.calibredefence.co.uk/saudi-houthi-missile-exchange-sanaa-airport-strikes/
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