Yemen's pro-Iran Houthi rebels have signaled they will not completely block ship traffic through the Bab el-Mandeb Strait, the entrance to the Red Sea. As the possibility of a Red Sea blockade eased, international oil prices — which had risen for five consecutive sessions to surpass $100 per barrel — plunged more than 4% during intraday trading.
According to AFP on the 24th, Houthi spokesman and chief negotiator Mohammed Abdulsalam stressed that "ship traffic through the strategic Bab el-Mandeb Strait has not been blocked" and that "there will be no full closure, as some have suggested." He added that "this measure is a limited maritime blockade affecting only Saudi Arabia."
Earlier, the Houthis declared an end to a four-year ceasefire on the 20th, pointing to Saudi Arabia as being behind the bombing of the airport in Sanaa, Yemen's capital. They subsequently warned of a full maritime blockade against Saudi Arabia as a retaliatory measure. Saudi Arabia has been exporting a significant volume of crude oil through the Red Sea route via the Bab el-Mandeb Strait since the Strait of Hormuz was blocked following the war between the United States and Iran. The Houthis also said on the 23rd that they had attacked two Saudi Arabian oil tankers attempting to pass through the Bab el-Mandeb Strait. U.S. President Donald Trump, while meeting with Lebanese President Joseph Aoun at the White House in Washington, D.C. on the 21st, was asked a related question by reporters and replied, "So far that hasn't happened, so we'll have to see how it goes," adding, "If that happens, we'll handle it."
After the Houthis denied the possibility of fully sealing the Red Sea entrance, international oil prices fell rapidly. On the same day, September-delivery Brent crude futures traded at $95.83 on London's ICE Futures Exchange, down 4.83% intraday. September-delivery West Texas Intermediate (WTI) crude futures on the New York Mercantile Exchange also fell 4.25% intraday to $88.27 per barrel.
Brent and WTI futures had responded sensitively to the possibility of a Houthi closure of the Red Sea, each drawing an upward curve for five consecutive trading sessions through the 23rd. Brent crude futures surged 7.04% on the 23rd, closing at $100.69 per barrel and surpassing the $100 mark for the first time in two months since May 22.
