Houthis hit two Saudi tankers as Brent crude tops US$100

By Nadia Petrova · 2026-07-26

The attack: missiles, drones and fire on the Encelia

Houthi forces struck two Saudi-linked oil tankers, the Encelia and the Layla, in the Red Sea on 22 July 2026, setting the Encelia alight in the most serious maritime escalation since Yemen's rebels declared a naval blockade two days earlier.verifiedVerified Source: streetinsider.com^[1] Ballistic missiles, cruise missiles and drones were all used in the assault, Houthi military spokesperson Yahya Saree confirmed.

Saree said: "We targeted two Saudi oil tankers, named Encelia and Layla, for their violation of the blockade decision issued by the armed forces."verifiedVerified Source: aljazeera.com^[2] The message was plain: the Houthis will back the blockade with live fire.

Saudi Arabia's Transport Authority moved quickly to confirm crew welfare. An official said: "All crew members of the Encelia are safe, and necessary measures have been taken to ensure the vessel's security."^[3] No casualties were reported from either vessel.

The blockade: Bab el-Mandeb declared a war zone

Houthi forces announced the maritime blockade of Saudi-linked shipping through the Bab el-Mandeb Strait on 20 July 2026, framing it as retaliation for a Saudi strike on Sanaa International Airport.^[4] The strait is roughly 30 kilometres wide at its narrowest point, separating Yemen from Djibouti at the southern entrance to the Red Sea, making it one of the world's most strategically sensitive shipping lanes.

Around 10 ships reversed course and retreated from the Red Sea after the Houthi blockade announcementverifiedVerified Source: fidelity.com, according to the same statement in which Saree confirmed the tanker strikes.^[5] Operators are treating the blockade as credible, not rhetorical.

The Bab el-Mandeb is the second pressure point on Gulf oil routes after the Strait of Hormuz. The International Energy Agency estimates that 3.5 to 5.5 million barrels per day of alternative pipeline capacity could re-route Gulf crude to avoid Hormuz entirely.^[8] A simultaneous blockade at both chokepoints would test those contingencies severely.

Oil markets: Brent above US$100 for first time since May

Brent crude climbed above US$100 a barrel on 23 July 2026, its highest level since May, as traders priced in the risk of prolonged disruption to Red Sea tanker traffic.^[6] The move represents a rise of more than US$20 from roughly US$79 a barrel recorded a month earlier.

Markets had been watching the Houthi blockade declaration since 20 July, but the live attack on named vessels confirmed the group's willingness to use force. The Encelia fire removed whatever ambiguity traders had been pricing in.

Bypass infrastructure: pipelines as the partial buffer

Saudi Arabia and the UAE have invested heavily in overland pipeline capacity designed to move crude without transiting contested waterways. Saudi Arabia's 1,200-kilometre East-West pipeline runs from Abqaiq to the Red Sea port of Yanbu, while the UAE's Habshan to Fujairah pipeline exports crude to the Gulf of Oman, bypassing both Hormuz and Bab el-Mandeb entirely.

The US Energy Information Administration puts the combined bypass capacity of those two systems at approximately 4.7 million barrels per day.^[7] That figure provides a meaningful buffer, though global spot prices respond to sentiment and logistics costs as much as to actual supply volumes.

Operators diverting tankers around the Cape of Good Hope rather than through the Red Sea add roughly two weeks to voyage times, inflating freight rates and the breakeven price at which cargoes reach Asian and European buyers. Those costs feed directly into the global benchmark price that Australian importers pay.

Australian impact: fuel costs and the inflation pipeline

Australia imports the bulk of its refined fuel and tracks global crude benchmarks closely. Australian Bureau of Statistics data show the Consumer Price Index rose 4.0 per cent in the 12 months to May 2026, with the transport component up 3.3 per cent over the same period.^[9] A sustained move above US$100 for Brent will apply direct upward pressure on that transport sub-index.

Petrol prices at the bowser typically lag crude movements by two to four weeks as refined product clears the supply chain. Brent holding above US$100 through August is likely to register in the September quarter CPI print, adding pressure on the Reserve Bank of Australia as it weighs the pace of any rate adjustment.

Yahya Saree's 22 July statement made no offer of negotiation and set no timeline for lifting the blockade, leaving the Bab el-Mandeb disruption open-ended as of 23 July 2026.

Nadia Petrova

Nadia Petrova covers breaking news and sport for Bushletter. Fast and verb-led, he writes with a news-wire cadence and no patience for PR spin.