Last Updated on 14 seconds ago by TodayWhy Editorial
On Wednesday 5 August 2026, oil traders got two pieces of news within hours of each other. The first was good: the US, Iran and Oman were reportedly close to a 60-day deal to reopen the Strait of Hormuz. The second undid most of the relief: Yemen’s Houthis said they had just attacked a Saudi vessel in the Red Sea.
Brent crude, which had been sliding toward $76 on the Hormuz optimism, snapped back up. That single afternoon captures the whole story of why Red Sea tensions threaten to raise fuel prices further, even as the war’s original chokepoint edges toward a resolution.
Why Red Sea tensions matter even if the Strait of Hormuz reopens
Here is the detail that most headlines miss: the Red Sea isn’t a second, unrelated crisis. It’s the pressure valve Saudi Arabia built specifically to survive the first one.
Since Iran effectively closed the Strait of Hormuz in March 2026 — the chokepoint that normally carries about a fifth of the world’s oil — Saudi Arabia has rerouted the majority of its exports away from the Persian Gulf entirely. Riyadh redirected crude through its East-West pipeline to the Red Sea port of Yanbu, and shipments out of Yanbu through the Bab el-Mandeb Strait surged to roughly 3.5 million barrels a day in June, up from just 240,000 barrels a day the same month a year earlier.
That pipeline and that port are now Saudi Arabia’s main way of getting oil to market while Hormuz stays disrupted. It is not a coincidence that Iran’s Houthi allies in Yemen have specifically targeted the pipeline infrastructure feeding Yanbu, and declared a maritime blockade against Saudi Arabia itself in late July. If the strategy is to squeeze Gulf oil exports, hitting the workaround route is exactly as effective as hitting the original one — arguably more so, since markets had started treating Yanbu as the safe alternative.
Why Red Sea tensions center on Bab el-Mandeb
The Bab el-Mandeb Strait — Arabic for “Gate of Grief” — is the narrow passage where the Red Sea meets the Gulf of Aden, separating Yemen from the Horn of Africa. At its narrowest point it is only about 20 miles wide.
Under normal conditions, roughly 7 to 8 percent of the world’s seaborne oil and refined products passes through it, headed for the Suez Canal and on to European and Asian markets. That is smaller than Hormuz’s fifth of world supply, but it is not a minor route — and its importance has grown specifically because so much traffic now depends on it as the Hormuz alternative.
Shipping data from the tracking firm Kpler showed traffic through Bab el-Mandeb fell by roughly a third in a single day after the Houthis declared their blockade against Saudi Arabia, with multiple tankers carrying Saudi crude turning back before reaching the strait rather than risk the passage.
Video: Ansarullah Houthis claim attack : Group says it targeted a Saudi tanker in Red Sea
Why today’s Red Sea tensions differ from the 2024 Houthi campaign
Readers may remember Houthi attacks on Red Sea shipping from 2023 and 2024, when the group targeted vessels linked to Israel over the war in Gaza and forced much of global container shipping to reroute around Africa. That campaign mostly spared oil tankers and mostly spared Saudi Arabia.
This is a different, narrower target. The current Houthi action is explicitly aimed at Saudi oil exports, in coordination with Iran’s broader campaign against Gulf shipping lanes during the 2026 war. It is a more targeted squeeze on a smaller number of ships carrying a specific kind of cargo — Saudi crude — rather than a blanket disruption of container traffic.
Why oil prices haven’t spiked as much as the disruption suggests
This is worth being honest about when weighing Red Sea tensions against the headlines, because overstating the price impact would be misleading. As of 5 August 2026, Brent crude was trading around $80 a barrel and WTI around $76 — elevated compared to pre-war 2026 levels, but well short of the $100-plus peaks seen earlier in the conflict.
Markets have partly priced in a Hormuz resolution: Qatar has drafted an interim de-escalation proposal, Iran is reportedly weighing a plan to let European countries help clear mines from the strait, and Saudi Arabia has been holding talks with the Houthis through Omani mediators specifically to keep the Red Sea situation from escalating further. Prices are reacting to that diplomatic push as much as to the attacks themselves.
That is precisely why the Red Sea matters as a threat rather than a certainty. It is the scenario that could undo the price relief a Hormuz deal would otherwise bring — not a guaranteed outcome, but a live risk sitting directly underneath the more optimistic headlines.
Why Red Sea tensions may hit refining harder than crude
Crude oil futures are only part of what determines the price at the pump, and the less-visible part of this story is arguably the more important one for consumers.
Around 6 million barrels per day of global refining capacity is currently offline or constrained, according to industry estimates, a mix of Middle East disruption and unrelated outages elsewhere. Refining margins — the difference between what a refiner pays for crude and what it earns selling finished fuel — have climbed to record highs as a result. Diesel, gasoline and jet fuel have all tightened independently of the crude price itself.
Energy analyst Daniel Yergin has described this as “the big problem” facing the market: even if crude oil supply stabilizes, refined product shortages can keep pump prices elevated on their own, since a barrel of crude sitting in a tanker is not gasoline until a refinery processes it — and Red Sea disruption adds cost and delay to that entire chain, not just to the raw commodity.
Why a Hormuz deal wouldn’t fully solve this
Even in the most optimistic scenario under discussion — a 60-day interim deal allowing inbound ships to transit Iranian waters and outbound ships to transit Omani waters — the Red Sea threat doesn’t automatically disappear.
The Houthis are a separate actor from the Iranian government negotiating in Muscat, even if they are Iran’s ally. A ceasefire or interim arrangement over Hormuz specifically does not bind Yemen’s Houthi movement, which has its own grievances against Saudi Arabia and its own decision-making structure. Saudi Arabia’s talks with the Houthis through Omani mediators are a separate, parallel track from the US-Iran-Oman Hormuz negotiations — and there is no guarantee both tracks resolve on the same timeline, or at all.
That is the structural reason global fuel prices remain vulnerable even under a best-case Hormuz outcome: the world’s two most important Middle East oil chokepoints are now controlled, in practice, by two different actors with two different sets of demands.
What would make Red Sea tensions send prices sharply higher
Three scenarios would matter more than the current level of attacks:
A full Bab el-Mandeb closure. The Houthis have not attempted to fully seal the strait the way Iran effectively closed Hormuz. A shift to mining or sustained attacks on all traffic, rather than targeted strikes on Saudi-linked vessels, would be a significant escalation.
Collapse of the Hormuz talks. If the US-Iran-Oman negotiations fail and strikes on Hormuz resume at their earlier intensity, a Red Sea disruption arriving at the same time would compound rather than substitute for the Hormuz risk.
A widening Saudi-Houthi conflict. Saudi Arabia fought a long war against the Houthis before a fragile truce years ago. Escalation back toward that conflict, rather than the current narrower campaign against oil shipments, would raise the stakes considerably.
For the fuller picture of how the Hormuz side of this crisis has moved oil prices so far, see our Strait of Hormuz oil price tracker, and for the legal fight over who actually controls that waterway, see who owns the Strait of Hormuz.
Frequently asked questions
Why are Red Sea tensions threatening fuel prices right now?
Because the Red Sea route through Bab el-Mandeb has become Saudi Arabia’s main way of exporting oil while the Strait of Hormuz stays disrupted. Houthi attacks on that route threaten the workaround itself, not just a secondary shipping lane.
How much oil passes through Bab el-Mandeb?
Normally around 7 to 8 percent of the world’s seaborne oil and refined products, though that share has grown recently as more Saudi exports were rerouted there to avoid the Strait of Hormuz.
Is this the same Houthi campaign from 2023-2024?
No. The earlier campaign targeted vessels linked to Israel over the Gaza war and mostly avoided Saudi oil shipments. The current action specifically targets Saudi Arabia and its oil exports, tied to the broader 2026 Iran conflict.
Would a Strait of Hormuz deal fix the Red Sea problem too?
Not automatically. The Houthis operate independently of the Iranian negotiators discussing Hormuz, and Saudi Arabia’s talks with the Houthis are a separate diplomatic track that could resolve on a different timeline, or not at all.
Why haven’t fuel prices spiked as much as the disruption suggests?
Markets are partly pricing in diplomatic progress on both the Hormuz talks and Saudi-Houthi mediation. Brent has stayed in roughly the $76-90 range rather than returning to the $100-plus peaks seen earlier in the 2026 war.
What would cause a bigger price spike from here?
A full closure of Bab el-Mandeb rather than targeted strikes, a collapse of the Hormuz negotiations, or a broader escalation between Saudi Arabia and the Houthis beyond the current campaign against oil shipments.