Confronted with a Houthi naval blockade and burning tankers off Yanbu, Saudi Arabia's carefully engineered workaround to Hormuz is unravelling just as Asian refiners scramble for alternatives.

WHAT: Houthis struck two Saudi tankers in the Red Sea, forcing cargo diversions.

WHY: Yemen's rebels retaliated for the Sanaa airport strike and the kingdom's blockade.

WHAT NEXT: Refiners face Cape of Good Hope detours, higher freight and tighter supply.

The strategic logic that underpinned Saudi Arabia's energy security architecture for a decade rested on a single premise. If the Strait of Hormuz ever closed, crude could still leave the kingdom westward, pumped across the peninsula to Yanbu and shipped through the Red Sea. That premise is now in tatters.

Yemen's Iran-backed Houthi movement said on Thursday it had struck two Saudi tankers, the Encelia and the Layla, in the Red Sea, setting both ablaze and marking the first vessel attacks since the group declared a naval blockade of Saudi-linked shipping earlier in the week. The state-run Saudi Press Agency confirmed the Encelia had been set on fire overnight but made no mention of the Layla. There were no reports of casualties, according to the Houthis' SABA news agency.

Brent crude jumped more than 6% to trade around $100 a barrel, its highest since May, before a short-lived preliminary peace deal between Washington and Tehran collapsed. The attack came on the twelfth night of US strikes across Iran, prompting President Donald Trump to warn on social media that "if they do this again, the U.S. will hold Iran responsible, in that the Houthis are a Surrogate and/or Proxy of Iran, and major military punishment will be inflicted upon Iran and, of course, the Houthis, themselves."

TWO CHOKEPOINTS, ONE CRISIS

The vulnerability of the Bab el-Mandeb chokepoint has been laid bare at precisely the moment Hormuz has become effectively unusable. Around 12% of global trade, and roughly a quarter of container traffic, passes through the strait between the Arabian Peninsula and the Horn of Africa. On the other side of the peninsula, Kpler data showed only three commodity vessels transited Hormuz on Tuesday, down from four the previous day, with no very large crude carriers (VLCCs) or LNG tankers observed.

That has left the Gulf's producers unevenly exposed. Iraq, Qatar, Kuwait and Bahrain have virtually no alternative to Hormuz. Saudi Arabia and the United Arab Emirates possess pipelines that reach terminals on the Red Sea and the Gulf of Oman. During the effective closure of Hormuz over the past five months, Yanbu absorbed the load, exporting about 4.1mn bpd in June and rerouting roughly 64% of the Saudi crude that would otherwise have moved through the strait, according to Kpler.

The Houthi announcement of a "siege" on the kingdom, following an attack on Sanaa International Airport, has now placed that redirection in jeopardy. Kpler counted 12 laden tankers still in the Red Sea after loading at Yanbu, with two more turning off their automatic identification system transponders near Bab el-Mandeb. Empty tankers on the inbound leg were also hesitating.

"The movements are the first visible indication that the blockade threat is beginning to affect Saudi crude routing," Kpler analysts Emmanuel Belostrino and Jashan Prema wrote. "They also expose a growing vulnerability in Riyadh's conflict response: The Red Sea corridor that allowed Saudi Arabia to reduce its dependence on the Strait of Hormuz is now facing its own security risk."

THE LONG WAY ROUND

The vessels Rodos and Xin Long Yang, together carrying 2.8mn barrels of Saudi crude bound for Asia, have already reversed course. The Liberia-flagged Rodos, originally headed for India's west coast after loading at Yanbu, was signalling the Suez Canal on Tuesday, ship-tracking data via LSEG and Kpler showed. South Korea's Hyundai Oilbank was reported to be seeking a VLCC to load at Yanbu with the option of routing through the Suez Canal and the SUMED pipeline before continuing to South Korea.

The mechanics are awkward. A fully laden VLCC cannot transit the Suez because of its draft, so operators must either lighten the load using the SUMED pipeline, which links the Red Sea to the Mediterranean, and reload on the Egyptian side, or switch to smaller Suezmax tankers. Both options erode economics and slow throughput.

The alternative, sailing north through Suez, into the Mediterranean, out through Gibraltar and around the Cape of Good Hope, adds weeks. Kpler estimates the Yanbu-to-South Korea voyage lengthens from about 24 days to roughly 54. Freight, fuel and insurance costs climb in step.

Homayoun Falakshahi, head of crude oil analysis at Kpler, said Saudi exports from Yanbu are "predominantly loaded on VLCCs", meaning any pivot to Suez would demand "a material shift towards Suezmax liftings or additional lightering operations". "Maintaining current export rates would require materially higher terminal productivity, making logistics the key bottleneck," he added.

Sumit Ritolia, lead refining and energy analyst at Kpler, told Al Jazeera the longer voyages would push up bunker fuel consumption, insurance premiums and freight rates. "The impact is, therefore, expected to extend beyond the affected cargoes by reducing effective tanker availability and supporting freight markets more broadly," he said.

ASIA'S EXPOSURE

Roughly 6mn bpd of crude passes through Bab el-Mandeb bound for Asia, on Kpler's numbers. Two-thirds is Saudi barrels; the balance, some 1.9mn bpd, is Russian crude. India is most exposed, with more than half of its crude imports transiting the strait, on top of a near-50% reliance on Hormuz for its Gulf barrels. Pakistan sources 36% of its crude through Bab el-Mandeb, the Philippines 37%, South Korea 31%, Japan 28%, Taiwan 22% and China 19%.

The refining picture matters too. Saudi Arabia's western coast hosts nearly 1.9mn bpd of refining capacity and is a significant supplier of diesel to Europe. Analysts flagged the possibility that the Houthis could escalate by targeting refineries themselves, an outcome that would tighten European middle distillate balances at a time of already fragile supply.

The precedent is uncomfortable. During the 2023-2025 Red Sea campaign that ran alongside the Gaza war, Houthi missiles, drones and small boats sank four vessels, killed nine seafarers and drove Bab el-Mandeb traffic to record lows. Subsequent US strikes killed at least 238 civilians between March 15 and May 6, 2025, according to the Yemen Data Project, including more than 68 people at a migrant detention centre in Saada and 84 at Ras Issa port.

DIPLOMACY IN RETREAT

The diplomatic track appears to be fraying. Iraqi Prime Minister Ali al-Zaidi travelled to Tehran on Thursday to press for dialogue and pledge that Iraqi territory would not be used to attack Iran, his office said. He had met Trump in Washington earlier in the month. An Arab diplomat, speaking on condition of anonymity, told reporters that Gulf capitals were increasingly pessimistic about finding an off-ramp, though Pakistan and Turkey continued to push for de-escalation.

For Riyadh, the calculation has shifted. The Red Sea was never meant to be a front line; it was the insurance policy. With missiles now landing on tankers off Yanbu, the kingdom faces the prospect of defending two maritime flanks simultaneously while shipping economics for its most important customers deteriorate by the week. The Suez detour keeps crude moving, but at a pace and cost that will test both terminal productivity at Yanbu and the patience of Asian refiners already paying up for barrels that used to be a short sail away.