The Iran-aligned Houthis have declared a complete ban on Israeli ships in the Red Sea, threatening a critical alternative route that Saudi Arabia relies on to export oil amid the Iran conflict. This waterway serves as a vital shortcut for global trade between Europe and Asia, handling nearly 10% of seaborne commerce before attacks began in 2023.

Saudi Arabia has diverted 3.65 million barrels a day of crude via the Yanbu port on the Red Sea since Iran effectively closed the Strait of Hormuz. However, ships carrying this oil must navigate the narrow Bab el-Mandeb Strait near Yemen's coast, where the Houthis have launched repeated attacks. Maritime traffic through this chokepoint collapsed from roughly 10% to 3% of global trade last year.

The Houthis, officially Ansar Allah, control much of Yemen's Red Sea coastline and have targeted commercial vessels since 2023, initially claiming they only struck ships linked to Israel. Their definition proved broad, prompting ship operators to reroute around Africa—a costly detour adding thousands of miles and two weeks to journeys. Previous strikes prompted Operation Prosperity Guardian, a US-led naval task force involving over 20 nations.

If Houthi attacks resume widely, they could jeopardize Saudi oil exports that keep global markets supplied. The group weakened after US and Israeli airstrikes killed leaders in 2024, but retains missile capabilities. Their June declaration coincided with Iran-Israel flare-ups, suggesting potential escalation that could send oil prices higher.