Red Sea Risks and Saudi Oil Routes

In early September 2026 Houthi forces pushed down Yemen’s Red Sea coast and seized key positions on islands and the mainland near the Bab el-Mandeb Strait, a narrow chokepoint linking the Red Sea to the Gulf of Aden. By taking Perim (also called Mayun) and towns such as Dhubab and Mocha, the group acquired the ability to threaten ships that pass the southern entrance to the Red Sea, which increases danger for commercial traffic and oil tankers.

Saudi Arabia responded by closing the East‑West pipeline after a series of attacks on energy facilities; the pipeline had been carrying roughly five million barrels per day to Red Sea terminals and thus helped bypass the Strait of Hormuz. With that route disrupted, exports and loading schedules have been affected and port operations at Yanbu and other terminals have been constrained, while operators have been forced to consider longer voyages around Africa.

Maritime authorities, including the United States Maritime Administration, have issued advisories that vessels associated with Israel, the United States or the United Kingdom face heightened risk in the southern Red Sea. Insurance markets have been repricing war‑risk cover and some underwriters are limiting exposure to Saudi‑linked voyages, so shipping costs and delays are likely to rise unless security conditions change.

Consequently, freight rates and war‑risk premiums have risen in recent months, and leading underwriters have debated limits on coverage for voyages tied to Saudi exports. If insurers withdraw capacity or restrict cover, owners may face higher costs or be unable to secure passage through the Red Sea, which would prompt more rerouting around the Cape of Good Hope and add weeks to delivery times for some cargoes.