Yemen's Houthi rebel group said on 20 July that it was imposing a ban on maritime navigation linked to Saudi Arabia, framing the move as a response to what it described as the kingdom's ongoing blockade of Yemen and military aggression against the country. The move could threaten not only crude exports from Saudi Arabia's Red Sea terminal of Yanbu, but also steel shipments into the kingdom.
The immediate exposure appears higher for vessels sailing to Saudi Red Sea ports from Asia through the Bab el-Mandeb strait, while cargoes reaching ports such as Jeddah or King Abdullah Port from the Mediterranean via the Suez Canal would avoid the Bab el-Mandeb area and may face a lower operational risk, unless the Houthis seek to target Saudi port calls more broadly.
"I guess the situation will get worse and will definitely affect shipping charges, because vessels would have to turn around the whole of Africa, especially given the impact on the strait of Hormuz," a trader said. "Let's see what happens in the next few days. Only the Europe gate will remain open."
The Houthi group said in a statement that the measure would take effect immediately under a "siege for siege" formula. It also warned of further escalation should Saudi Arabia take additional military steps, while calling for continued mobilisation across Yemen.
Saudi Arabia imported around 3.1mn t of steel products in the first quarter of 2026, down from 3.8mn t a year earlier, according to Global Trade Tracker (GTT).
China was the largest supplier of steel products to Saudi Arabia in the first quarter, shipping around 1.2mn t, GTT data show. This included 667,000t of hot-rolled coil, 21,000t of cold-rolled coil, 140,000t of hot-dipped galvanised steel, 132,000t of semi-finished products including slabs and billets, as well as other steel products.
Any disruption to Red Sea shipping could therefore complicate inbound flows of flat steel, semi-finished products and other steel cargoes.
At least two steel cargoes from China are currently en route to Saudi Arabia's Red Sea coast and have not yet crossed Bab el-Mandeb. The 55,561dwt Better Victory is carrying steel from Tangshan to King Abdullah Port, while the 56,860dwt Dato Success is sailing from Caofeidian to the same port, according to analytics firm Kpler. Neither vessel has shown signs of turning around.
Several tanker owners had already been preparing for a possible escalation, as the Houthis have used "siege for siege" rhetoric for some time.
The very large crude carrier (VLCC) VL Pioneer made a U-turn in the Red Sea on 17 July and is now ballasting eastward instead of heading to Yanbu, according to Kpler data. The VLCC Farhah, which loaded at Yanbu on 10 July, made a U-turn at Bab el-Mandeb on 17 July and returned to the Saudi port, Kpler data show. But a number of vessels are still transiting the Red Sea.
The Houthi move could also put upward pressure on additional war risk premiums for ships transiting Bab el-Mandeb. Premiums were still relatively low in mid-June, at around 0.20-0.30pc of hull and machinery value for a seven-day period, with a 50pc no-claim bonus, according to market participants.
