The Houthis have declared a full naval blockade of Saudi Arabia, putting oil's last detour after Hormuz, the Red Sea, at risk. Meru updates a story he's been tracking since a Houthi delegation's plane was targeted on the runway at Sana'a airport, an attack the Houthis blame on Saudi Arabia. On July 20, the Houthis declared a full naval blockade of Saudi Arabia and ordered a national mobilization, echoing their 2023 campaign that hit 79 ships in the Red Sea. The stakes: since Hormuz was closed, Saudi Arabia has been rerouting about 70% of its exports, roughly 5 million barrels a day, through the Red Sea port of Yanbu and the 29km-wide Bab-el-Mandeb strait, which alone carries 10% of the world's seaborne crude. Even if tankers dare the strait, the costs pile up. Suez requires offloading crude via pipeline to lighten VLCCs (very large crude carriers), adding roughly $1 million in tolls and pipeline fees, while the Cape of Good Hope route stretches a 20-day trip to 50 days and adds $1.5 million in fuel. War-risk insurance has already spiked to 2.5% of hull value, about $2.5 million per supertanker. Meanwhile Iran claims two tankers exploded near Hormuz, US bases in Jordan, Kuwait and Bahrain are under renewed attack, and US pump prices jumped from $3.87 to $4.10 a gallon in a week, crossing the psychologically loaded $4 mark ahead of midterms. US Central Command is set to resume operations against Iran once US markets close today. Meru's read: Bab-el-Mandeb doesn't have to fully close for the damage to show up, longer routes and fatter insurance bills already raise the delivered cost of oil.
Why it matters · Hormuz risk was already priced in; a Red Sea blockade on top removes oil's last detour, so even rerouted supply gets structurally costlier through longer voyages and spiking war-risk insurance.
Worth asking · Is this Houthi blockade another bluff that fades, or the one that finally shuts oil's last detour?