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The number of vessels transiting the Bab El-Mandeb Strait into and out of the Red Sea has fallen by 50% compared to the already suppressed levels of the second quarter, averaging 31 ships per day in late July. Clarksons Research reports that the decline is driven by a Houthi announced blockade of Saudi Arabian shipping, which followed a threat made on July 20 and an attack on a tanker two days later. With exports from Saudi’s Yanbu oil terminal averaging 3.8 million barrels per day, the disruption forces shippers to reroute shipments to Asia around the Cape of Good Hope, doubling the usual travel distance for these cargoes.
Tanker rates climb as Red Sea routes close
Steve Gordon, global head of Clarksons Research, noted that Very Large Crude Carrier (VLCC) crossings through the Bab El Mandeb have dropped to an average of one per day over the past week, down from an average of three per day across the second quarter. This reduction is driving up spot earnings for tankers, with VLCC rates rising by 13% to $145,000 per day and VLGC rates increasing by 24% to $172,000 per day in the same period. Despite the activity in the Red Sea, the Gulf of Oman has seen little improvement, with transits down 90% on pre-conflict levels and tonnage drops exceeding 95%. The roughly 1 million barrels per day of oil leaving the Gulf recently is a steep decline from the 10 million bpd seen in early July.
While the Red Sea remains volatile, with a tanker reporting a splash from an unknown projectile on July 26, the situation in the Gulf of Oman is even more severe. No LNG carrier or VLGC transits have been reported through the Strait of Hormuz for over 10 days. Iran has enforced the effective closure of the waterway through repeated attacks on ships transiting the US-administered southern route off the coast of Oman, while the US has countered with its own blockade, disabling a second tanker since the measures were put in force after the collapse of the US-Iran MoU.
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Energy companies are already looking for ways to bypass these chokepoints. Clarksons analysts suggest that export capacity from bypass pipelines could rise from 8 million barrels per day today to 17 million bpd if all proposed infrastructure projects are built, though these routes often involve longer shipping distances. The conflict continues to ripple through global markets, but Clarksons notes that the Red Sea and Strait of Hormuz have been relatively quiet in recent days. On July 27, the Houthi claimed to have targeted “a number of sensitive targets and points related to the supply and transportation of crude oil from eastern Saudi Arabia to Yanbu” using drones. Analysts suggest that without a significant diplomatic resolution, shippers will likely continue to favor longer routes that guarantee safety over direct paths through the region.
Global shipping networks face immense strain from these closures. Maintaining financial stability becomes increasingly difficult for logistics firms as costs rise. The rerouting of goods adds days to delivery schedules, creating bottlenecks that affect supply chains worldwide. Shippers must now weigh the financial burden of longer voyages against the risks of handling active conflict zones.
