As tensions between the U.S. and Iran escalate, shipping traffic through the Strait of Hormuz has plummeted, causing instability in maritime logistics that has now spread to the Red Sea. The Iran-aligned Houthi rebels in Yemen have declared a maritime blockade against Saudi Arabia, which has redirected its oil exports to avoid the Strait.
According to shipping analytics firm Kpler, only four vessels carrying commodities passed through the Strait of Hormuz on July 20, a decrease from seven the previous day. No Very Large Crude Carriers (VLCCs) or liquefied natural gas (LNG) carriers were reported.
Attacks on vessels have continued, with reports on July 21 indicating that a tanker was struck by a projectile near the Strait of Hormuz, prompting crew members to abandon ship. Two other tankers were attacked the previous day in the same vicinity.
With oil transport through Hormuz disrupted, Saudi Arabia has significantly increased its reliance on the Red Sea. An analysis by Reuters of data from Kpler and Signal Ocean revealed that over 70% of Saudi oil exports are now being routed to the Red Sea port of Yanbu.
Shipments from Yanbu have surged to an average of about 4 million barrels per day, more than quadrupling from 973,000 barrels per day a year ago. The volume of oil passing through the Bab el-Mandeb Strait also rose to 7.4 million barrels per day last month, up from 4.2 million barrels a year earlier.
However, the Red Sea route, which was seen as a safer alternative, is now facing new threats. The Houthis announced their intention to impose a maritime blockade, citing Saudi attacks on the international airport in Sana'a and the blockade of ports under their control.
While the specifics of the blockade have not been disclosed, concerns are growing that the Houthis may target Saudi vessels in this critical maritime corridor, leading to a rapid increase in shipping risk costs.
According to Reuters, the war risk insurance premiums for vessels transiting the Red Sea have jumped from about 0.3% to 0.75% of the vessel's value since the Houthi blockade announcement. If passage through Bab el-Mandeb is restricted, Saudi oil bound for Asia would need to navigate around the southern tip of Africa, significantly increasing transport times and costs.
In the past, attacks by the Houthis on commercial vessels led to significant disruptions in global logistics. The International Monetary Fund (IMF) reported that trade volumes through the Suez Canal fell by 50% in the first two months of 2024 compared to the same period the previous year.
The United Nations Conference on Trade and Development (UNCTAD) noted that as vessels began to reroute around the Cape of Good Hope, container shipping rates from Shanghai surged by an average of 122% and by 256% for shipments to Europe between early December 2023 and early February 2024.
Now, with operations in the Strait of Hormuz severely curtailed, there are concerns that disruptions could extend to Bab el-Mandeb, further straining oil and logistics transport.
Notably, the primary destinations for oil and petroleum products departing from Yanbu include South Korea, Japan, China, Singapore, and India, meaning that Asia's energy supply chain could be directly impacted. The volume of oil passing through Bab el-Mandeb last month accounted for about 7% of global oil production.
In response, Saudi Arabia has taken action. The Saudi-led Arab coalition stated that it is implementing measures to protect commercial vessels transiting Bab el-Mandeb and will respond swiftly and decisively if the Houthis attack ships.
Meanwhile, U.S. forces have been conducting airstrikes against Iran for ten consecutive days, aiming to weaken Iran's ability to attack commercial vessels. President Donald Trump recently warned that Iran would face severe consequences for each U.S. military casualty.
Amid escalating hostilities, efforts for a ceasefire continue. Mediators have proposed a ten-day truce to revive a temporary agreement reached last month between the U.S. and Iran, although both sides have yet to accept the proposal.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.