In an escalation of the conflict in West Asia, the Houthis, Iran’s allies in Yemen, said they attacked two Saudi Arabia-flagged tankers in the Red Sea on Thursday, as part of a blockade on Saudi shipping.
According to Al Masirah, the Houthis’ official television channel, the attacks on the Encelia and the Layla took place early on July 23. Saudi Arabia’s official Saudi Press Agency has confirmed the projectile attack on the Encelia, adding that the crew is safe and the vessel secured. The attack on the Layla, a three lakh-tonne Saudi-flagged Very Large Crude Carrier (VLCC), remains unconfirmed.
Soon after the attacks were reported, Brent crude rates surged past $100 a barrel, a 7% jump over the previous day’s close of around $94.
The escalation off the Bab al-Mandab Strait — the Red Sea’s exit to the Arabian Sea, including for Russian tankers transiting the Suez Canal — comes close on the heels of Ukraine targeting Russian merchant ships, including oil tankers, off the port of Novorossiysk, a Russian city on the Black Sea coast. Ukraine has claimed more than 180 hits on Russian ships in the Black Sea in July. On July 17 and 19, Russia attacked two ships off Odesa, a Ukrainian port on the Black Sea, killing four Indian seafarers.
These attacks are erupting in regions crucial to India’s oil imports. After constraints on the Strait of Hormuz, Saudi Arabia had been piping some 4 million barrels of crude across the country to be shipped out through Yanbu — a port city on the Red Sea coast — largely to Asian markets, including India.
Saudi Arabia currently supplies around 0.4 million barrels per day (mbpd) to India, via Yanbu and Bab al-Mandab. India’s crude oil imports are a little less than 5 mbpd. “A disruption may mean cargoes may need to be rerouted via the Suez Canal, into the Mediterranean and around Africa, but that will take much longer and come with higher freight costs,” says Pankaj Srivastava, a senior vice president at Rystad Energy.
Mr. Srivastava says India imported 2.25 mbpd of Russian crude in June, with nearly 0.7 mbpd originating from Novorossiysk. “If the disruption persists or infrastructure damage is more extensive, India could face additional pressure in securing replacement crude volumes,” he says, adding that the immediate impact is likely to remain manageable.
Since the Houthi hijacking of the car carrier Galaxy Leader in November 2023, ship traffic across the Suez Canal had plummeted. It picked up in January this year, however, and surged in March, as Yanbu became an alternative to the Strait of Hormuz. The Houthis have cited Saudi Arabia’s “blockade of supplies” and the attack on Sanaa international airport in Yemen on July 13 as reasons for their blockade. Reuters has, however, reported that Iran is inspiring the Houthi blockade of Saudi oil-carrying ships.
Shipping industry sources say insurance rates climbed 10 to 15 times as soon as the Houthis announced their blockade on July 20, nearly matching rates for the Strait of Hormuz. Meanwhile, the U.S.-based think tank, Institute for the Study of War, said that at least seven vessels have already diverted their routes to avoid the Bab al-Mandab Strait as a consequence of the tanker attacks.
Erik Grundt, Rystad Energy’s senior market analyst, says: “In sailing-time terms, the detour through the Suez Canal and around Africa stretches the Yanbu-to-India (west coast) voyage from about eight days to nearly 39 days.” Compounding this, VLCCs are too large to transit the Suez Canal fully loaded, so they must partially offload at Ain Sukhna and reload at Sidi Kerir on the Mediterranean side, adding time and complexity.
Mr. Srivastava says India, however, is now more resilient, having diversified its crude sources, which now include African nations, Brazil, Guyana, and the U.S. Indian refineries are capable of handling a wide range of crude oils, allowing them to quickly take crude from other sources.
Published - July 23, 2026 07:17 pm IST