Yemen’s Houthis claim they fired on two Saudi Arabian oil tankers in the Red Sea late Wednesday, opening a new front in a region already destabilized by the crisis at the Strait of Hormuz.
Brent crude oil hit $100 a barrel for the first time Thursday since May after the Iran-backed militants targeted the Saudi-owned Encelia and Layla. Saudi officials and the United Kingdom Maritime Trade Operations (UKMTO) Centre confirmed that the Encelia was struck by an unknown projectile, which had caused a fire aboard. The reported attack on the Layla has not been independently confirmed.
Oil prices have been volatile since the start of the war in Iran, with the country’s de facto closure of the Strait of Hormuz constricting traffic of 20 percent of the world’s oil supply. Any additional attacks in the Red Sea region would further squeeze its price movement. The Red Sea’s southern chokepoint, the Bab el-Mandeb Strait, hosted roughly 7 percent of global oil output in June.
Higher crude prices are likely to filter through to container shipping costs as carriers face another jump in bunker fuel expenses.
The relative lightness in container shipping traffic in the Red Sea has kept ocean freight largely insulated from the impacts Houthi attacks may bring, but shippers with goods passing through may need contingency plans in the event cargo gets dropped off at alternative ports.
“For now, the [smaller] regional carriers appear to continue to operate, but it would be very problematic for Asia-Red Sea cargo flows if this was to be impeded,” said Lars Jensen, CEO of Vespucci Maritime, in a post on LinkedIn Thursday. “We should hope this is not going to be the case, but just in case, shippers might want to be prepared that if Bab el-Mandeb genuinely is closed off, cargo already on vessels from Asia to the Red Sea is likely to suddenly being discharged in the ‘wrong’ ports across Asia, similar to what we saw when Hormuz was initially closed.”
The Houthis said they attacked the vessels with missiles and drones, accusing them of violating a naval blockade the group says it imposed on Saudi shipping in the Red Sea. That blockade extends to vessels of any origin attempting to dock at a Saudi port.
In a social media post Thursday morning, President Donald Trump said the U.S. would hold Iran responsible in the event of another Houthi attack on shipping.
“If they do this again…major military punishment will be inflicted upon Iran and, of course, the Houthis, themselves,” said the president.
The Yemeni group is responsible for a significant shift in global shipping patterns since late 2023, when they began firing on commercial vessels in the Red Sea in response to the Israel-Hamas war in Gaza. For nearly two years, the Houthis attacked ships in the Red Sea and the Bab el-Mandeb Strait, causing major ocean carriers to avoid the Suez Canal and instead divert their routes around southern Africa’s Cape of Good Hope.
For the most part, container shipping has maintained its sailings around the Cape of Good Hope even after the Houthis suspended their campaign last fall. For larger carriers, the security risks of any reescalation in the region have been too much to consider a wide scale return.
But Suez transits had been in an uptrend by early July, as some carriers deployed select services back to the area.
During the week ended July 12, 32 container ships transited the Suez Canal in either direction, with the three-week average reaching 34 crossings. The number was up from 26 in the previous three weeks.
Over in the Strait of Hormuz, crossings remain sparse. There were 15 confirmed transits on Wednesday, up from nine crossings the day prior.
The ongoing crisis has forced the Middle East’s largest port operator to reduce reliance on the strait.
DP World unveiled Wednesday it would build two new terminals at the UAE’s Port of Fujairah, which is positioned on the Gulf of Oman, more than 80 miles south of the Strait of Hormuz.
The project, agreed in principle with the Fujairah Ports Authority under a 50-year concession, includes a container and multi-purpose terminal and a general-cargo terminal. Construction is expected to take about 24 to 30 months.
The Port of Fujairah has been a more popular stop for vessels since the start of the war in Iran, as it sits on the UAE.’s east coast before the opening of the Strait of Hormuz.
Once operational, the terminals will increase DP World’s total container handling capacity in the UAE from 19.4 million TEUs to almost 22 million TEUs
DP World’s flagship port in the region, the Port of Jebel Ali, has seen exports decline 89 percent from pre-war levels as of early June, according to container tracking platform Vizion. Imports declined 54 percent. The Persian Gulf-adjacent port handled 15.6 million TEUs in 2025.
