What happened
Two oil tankers carrying Saudi crude reversed course in the Red Sea on Tuesday after Yemen's Houthi rebels announced a maritime embargo on Saudi Arabia. The vessels, originally headed for China and India, diverted toward the Suez Canal instead of transiting the Bab el-Mandeb strait into the Indian Ocean, according to Reuters.
Why it matters for the market
The Houthis declared the embargo on Monday, citing an eye-for-an-eye principle, after blaming Saudi Arabia for a strike on Sanaa airport. The Saudi-backed Yemeni government claimed responsibility for that strike. The move threatens to disrupt oil shipments through a key global chokepoint.
President Trump responded on Tuesday, saying the U.S. would take care of things if the Houthis follow through. He referenced a previous U.S. military campaign against the group last year, which he described as about 45 days of very powerful action. The Houthis had attacked commercial ships in the Red Sea and Gulf of Aden between March and May 2025.
The Red Sea disruptions come amid ongoing Iranian restrictions on shipping through the Strait of Hormuz, where U.S. Central Command has conducted strikes targeting Iranian military capabilities. Since July 6, Iranian forces have attacked at least 12 ships in the waterway, according to the International Maritime Organization. Brent crude oil has surpassed $94 per barrel as of Wednesday morning.
What traders should watch
Trump also repeated a threat to authorize strikes against Iranian civilian infrastructure if Iran continues targeting vessels in the Strait of Hormuz. The situation raises concerns about supply disruptions and heightened volatility in oil markets, with traders closely watching for further escalation.
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