Saudi Arabia halts oil exports in Red Sea lane after Houthi attacks


By Rania El Gamal

DUBAI (Reuters) – said on Thursday it was suspending through the Red Sea’s Bab al-Mandeb strait, one of the world’s most important tanker routes, after Yemen’s Iran-aligned Houthis attacked two ships in the waterway.

Brent futures rose 19 cents to $74.12 a barrel by 1305 GMT, extending their rally into a third day but slipping from a 10-day high in earlier trading.

and arch-foe have been locked in a three-year proxy war in Yemen, which lies on one side of the at the southern mouth of the sea, one of the most important trade routes for heading from the to

The Houthis, who have previously threatened to block the strait, said on Thursday that they had the naval capability to hit Saudi ports and other targets. has threatened to block another strategic shipping route, the

Saudi said the Houthis attacked two Saudi in the on Wednesday, one of which sustained minimal damage.

is temporarily halting all through immediately until the situation becomes clearer and the maritime transit through Bab al-Mandeb is safe,” he said.

It was not clear if a Saudi-led military coalition would take additional security measures or impose further restrictions on imports to Yemen, which is struggling with the world’s most urgent humanitarian crisis.

A senior said Saudi Arabia had already beefed up and that all crude vessels in the area are accompanied by security ships.

Saudi crude exports through Bab al-Mandeb are estimated at around 500,000-700,000 barrels per day (bpd), according to analysts and data. Most Gulf that transit the and pass through the strait.

The of the said the country was considering whether to follow suit.

The of Iran’s Revolutionary Guards Quds force, Qassem Soleimani, criticised the U.S. role in the

“The Red Sea, which was secure, is no longer secure with the American presence … (U.S. Donald) Trump should know that we are nation of martyrdom and that we await him,” Soleimani was quoted as saying on Thursday.

Industry and shipping sources said the suspension was unlikely to impact Saudi crude supplies to Asia, but could add shipping costs to Saudi vessels heading to and the due to a longer transit.

Traders said the suspension order was only for Saudi-owned vessels, so state-owned could still charter foreign ships to move its crude.

Saudi Arabia also has a pipeline route to the city of on the Red Sea keeping and well supplied — the 5-million-bpd Petroline.

The world’s largest has kept its crude shipments flowing during previous regional conflicts, including the 1980-1988 Iran-war when the two sides sought to disrupt each other’s in what was known as the Tanker War.

The OPEC heavyweight, a key U.S. ally, has led a pact among to boost output to cool the market after Trump imposed sanctions on and criticised OPEC for high prices.

Saudi reported shortly after Falih’s announcement that the kingdom’s chaired a meeting of the Political and but did not mention what topics were discussed.

Saudi Arabia leads a coalition of Sunni Muslim Arab states which intervened in Yemen’s war in 2015 to restore the internationally recognised government in exile and thwart what sees as Tehran’s expansionist ambitions in the region.

IS KEY

Saudi Arabia and the backed Trump’s decision to quit a nuclear deal with Iran. They accuse Iran of supplying the Houthis with weapons including missiles, which the group and deny.

The latest attack on Saudi could strengthen the Arab states’ position ahead of possible U.N.-sponsored peace talks between Yemen’s warring parties, which aim to avoid an all-out assault on the country’s main port city of

The Western-backed military alliance launched an offensive on June 12 to wrest from the Houthis in a bid to cut off the primary supply line of the movement, which holds the most populated areas of including the capital

But the alliance did not make major gains and on July 1 it halted operations to give the a chance to resolve the situation in Hodeidah and the wider conflict which has killed more than 10,000 people.

“The only way forward is to get Hodeidah. What we are planning to do is give diplomacy every possible chance to secure that,” Anwar Gargash, the UAE’s minister of state for foreign affairs, said in

The fears that cutting off Hodeidah may trigger a famine in Yemen, where around 8.4 million people are believed to be on the verge of

The says the Houthis have offered to hand over management of the port to the world body, but the Saudi-led coalition says that the Houthis must quit the western coast.

One of the coalition’s main justifications for intervening in was to protect shipping routes such as the Red Sea. It has said it foiled previous attacks there in April and May.

The is only 18 miles (29 km) wide, making hundreds of ships potentially an easy target. The said an estimated 4.8 million bpd of and products flowed through it in 2016.

(Additional reporting by William James, Aziz El Yaakoubi, Hesham Hajali, and Jonathan Saul; Writing by Ghaida Ghantous; Editing by and Giles Elgood)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)





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