Red Sea Tanker Traffic Falls to Multi Month Low After Houthi Threats

Crude oil prices held a bid on Tuesday, with the United States Oil Fund (USO) trading at 127.61 dollars, up 1.34% on the day, as red sea tanker traffic fell to its lowest point in months following a fresh round of Houthi attacks on Saudi oil infrastructure. The ETF, which tracks front month crude futures, sits well within its 52 week range of 102.42 to 142.33 dollars, with an RSI near 55 suggesting the move has room before it looks overbought.

A Chokepoint Under Pressure

Shipping data from Kpler, cited by Reuters, shows only 11 tankers passed through the Bab el Mandeb Strait on Sunday, a stretch of water linking the Red Sea to the Arabian Sea that handles a meaningful share of global crude and product flows. That is the thinnest volume recorded in months. The slowdown traces back roughly a week, when Iran aligned Houthi forces in Yemen declared a blockade on Saudi shipments and warned they would target tankers directly. They followed through, striking two Saudi oil tankers last week.

Ships Turning Back or Going Dark

Of the 11 vessels that made the transit Sunday, seven were oil tankers: four heading outbound, three inbound. Two of the inbound ships were very large crude carriers bound for the Saudi port of Yanbu to load crude, while a third inbound vessel had ties to Russia. On the outbound side, three tankers carried Saudi, Emirati, and Russian crude toward China, and one carried Saudi crude destined for Pakistan.

Some Saudi and Western operators have simply rerouted, sending ships north toward the Suez Canal or reversing course just before entering the strait from the Bab el Mandeb side. At least one tanker carrying Saudi crude reportedly switched off its transponder while transiting the strait last week, masking its location as risk to shipping spiked. Maritime intelligence firm Windward noted that Yanbu port has effectively flipped from mostly transponder visible tanker activity to almost entirely dark operations at berth, as crews try to avoid appearing on any targeting list.

What the USO Move Signals

The 1.34% gain in USO reflects the market pricing in tighter near term flows out of a critical export corridor rather than any shift in underlying demand. Inventories and OPEC+ production decisions still matter for the medium term direction of crude, but a supply route disruption tends to move prices faster than any of those slower moving fundamentals. The dollar's behavior also plays a role here, since a weaker dollar makes dollar denominated crude cheaper for holders of other currencies, amplifying upside moves during supply scares.

Is Red Sea Tanker Traffic Actually Recovering?

Reports of easing tensions surfaced Monday, but that has not yet shown up in higher transit counts at either Bab el Mandeb or the Strait of Hormuz. Until operators see a sustained run of safe passages, expect continued caution, more transponders switched off, and more ships choosing the longer route around the Cape of Good Hope instead of risking the strait.

Frequently Asked Questions

Is the red sea red?

No, the water itself is generally blue or blue green like most seas; it only appears reddish in certain conditions.

What is red sea rig?

There is no established offshore drilling platform commonly known as the Red Sea Rig; the term does not correspond to a specific named oil rig in current industry usage.

Why is the red sea red?

The name is thought to come from seasonal blooms of a reddish algae called Trichodesmium erythraeum, which can tint the surface water, along with reddish mountains bordering the sea.

Is the red sea still red?

The sea's water color has not changed; it remains predominantly blue, with occasional reddish tinges during algae blooms, much as it always has.

Why is the red sea not red?

Most of the time the algae bloom that gives the sea its name is not present in visible concentration, so the water reflects the typical blue tones seen in other tropical seas.

Live crude oil price and chart →