Brent crude futures climbed nearly 3% to trade close to $92 a barrel on Tuesday evening after Yemen's Houthi militia enforced a naval blockade against Saudi Arabia, triggering fresh concerns over disruptions to global oil supplies and maritime trade through the Red Sea.
The international oil benchmark marginally retreated as of 8:30 pm IST, but still traded 2.21% higher at $91.47, with traders pricing in the risk of prolonged shipping disruptions through one of the world's busiest energy trade routes.
The sharp rally came as two oil tankers carrying Saudi crude to China and India reportedly reversed course in the Red Sea following the Houthis' warning to shipping companies against loading or unloading cargo at Saudi ports.
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The group had warned that vessels involved in such operations could be targeted "in any location," raising fears of a wider disruption to energy shipments.
The Bab el-Mandeb Strait, controlled in part by the Houthis, is a critical maritime chokepoint linking the Red Sea to the Gulf of Aden.
Saudi Arabia has relied on its Red Sea export hub at Yanbu to route millions of barrels of crude to Asian markets while avoiding the Strait of Hormuz.
The Houthis said the blockade was imposed with immediate effect in response to what they described as Saudi Arabia's continued siege of Yemen and recent attack on Sanna airport.
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The Saudi-led coalition condemned the move as a violation of international law and an act of maritime piracy, adding that it had initiated protection measures for commercial vessels transiting the Bab el-Mandeb.
Analysts warned that even if attacks on commercial shipping do not materialise, the threat alone could disrupt tanker movements, increase freight and insurance costs, and tighten global oil supplies.
For India, which imports more than 85% of its crude oil needs, sustained gains in Brent prices could inflate the country's import bill, fuel domestic inflation and add pressure on government finances if elevated prices persist.
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