Oil prices staged a dramatic recovery from session lows during Asian and European trading on Tuesday, fueled by reports of a Houthi attack on Saudi Arabia. West Texas Intermediate (WTI) crude surged over 3%, trading near $94.2 per barrel. This week marks a new phase of open confrontation in the Gulf region, with Iran rewriting the navigational rules for the Strait of Hormuz through "restricted zones" and new航道 charts, while the US threatens to "destroy oil tankers." Concurrently, the Houthi group launched a large-scale assault on southern Saudi Arabia. With two critical global energy chokepoints simultaneously under pressure, this is no longer a single geopolitical event but a repricing of structural risk on the supply side.
US-Iran Standoff: Dual Rulebooks Emerge in the Strait of Hormuz
Iranian Parliament Speaker Mohammad Bagher Ghalibaf warned on Sunday that if the US strikes Iranian oil and gas assets, American energy interests in the Gulf will face proportionate retaliation. He bluntly stated that the Gulf's oil and gas production chain is "vast, vulnerable, and exposed to risk." US Defense Secretary Pete Hegseth countered on Thursday, calling the Iranian tanker fleet "defenseless" and vowing to destroy Iranian vessels if they attack US ships.
Iran's Supreme National Security Council Secretary, Ali Shamkhani, declared new shipping restrictions on Monday and published a revised navigation map. The newly designated restricted zone extends from near the US blockade line into parts of Gulf waters. A proposed international shipping corridor, passing through Iranian and Omani waters and managed with Iranian involvement, is expected to be finalized within days. Shamkhani made it clear that whether Iran keeps the Strait open "depends entirely on America's actions." This sets the stage for a potential "dual rulebook" scenario in the Gulf: Washington asserts its commitment to freedom of navigation, while Tehran demarcates its own shipping lanes and restricted areas. The Revolutionary Guard has warned that vessels on "unauthorized" routes could become targets.
This confrontation has been re-characterized by both the Institute for the Study of War (ISW) and Columbia University's Center on Global Energy Policy (CGEP) as a "regional economic and maritime war." Iran has also showcased an upgraded ballistic missile with a range exceeding 1,100 kilometers, shifting its narrative from "passive defense" to "pre-emptive action," thereby increasing the risk of miscalculation. The standoff's ripple effects are spreading to South Korea and Canada, and divisions are emerging within the Gulf camp itself. The UAE has suspended financial dealings with Iran and is accelerating the expansion of its east coast ports, pipelines, and alternative trade corridors to reduce reliance on conflict-prone routes.
Houthi Actions in the Bab el-Mandeb Strait: New Uncertainty on the Red Sea Flank
On Tuesday, the Houthis launched a major attack on southern Saudi Arabia, injuring over 70 people, including women and children, and causing fires and temporary operational halts at several oil and utility facilities. The Saudi-led coalition characterized the assault as a "serious escalation" and a "blatant violation of sovereignty." The coalition has vowed retaliation, while the Houthis have signaled an imminent statement regarding a "large-scale military operation deep inside Saudi territory." This attack came just hours after the Houthis accused Saudi airstrikes of killing six and wounding seven in a prison in the Jawf province, effectively shattering the four-year-old Yemen ceasefire.
Transit data, however, shows that the Bab el-Mandeb Strait is not completely blockaded. The official measure for vessels over 1,000 deadweight tons shows about 60 ships per day, with early September readings of over 60, near normal levels. Yet, Kpler's commodity ship tracking recorded only 29 vessels on Monday (down from 17 the previous day). Approximately 23 "dark ships" pass through daily with their transponders switched off. Since July 20, the Houthis have imposed a maritime embargo on Saudi-affiliated vessels, with some tankers turning back to reroute. For the market, the Bab el-Mandeb Strait represents a "second front" for Iranian pressure: both the Red Sea and the Persian Gulf chokepoints now carry significant risk exposure.
Saudi Crude Exports: Pressure Mounts on Both Flanks
Saudi Arabia's exports are heavily dependent on the eastward route through the Strait of Hormuz and the westward passage via the Bab el-Mandeb. Both are now under simultaneous pressure. On the eastern front, Hormuz transit has plummeted amid US-Iran tanker confrontations and Iran's newly established restricted zones, forcing a complete reassessment of security, insurance, and shipping routes for Gulf loading ports. On the western front, the Houthi embargo directly targets Saudi-linked vessels, sharply elevating the risk for Saudi-flagged ships on Red Sea routes. While Saudi Arabia has a domestic east-west pipeline that can partially bypass Hormuz, alternatives are limited if the western route is compromised. With both wings of its "dual corridor" strategy under duress, logistics costs, war risk premiums, and shipping times are all deteriorating, forcing the market to reprice a potential "phased export discount" for the kingdom.
Hormuz Traffic Reality: From 20 Million to 7 Million Barrels a Day
Pre-war, the Strait of Hormuz carried roughly one-fifth of global seaborne oil and LNG, with commodity vessel transits of about 90 to 140 per day and crude and refined product flows of approximately 20 million barrels per day. Currently, Kpler data shows only 7 commodity ships transited on Monday (versus 8 the day before), and the 10-day average through September 6 was about 10 vessels, the lowest since May, dipping to around 5 over the weekend. Flow data is equally stark: Macquarie estimates just 7 million barrels per day are now crossing the strait, with Vitol's gauge around 10 million barrels per day, a 60-70% contraction from pre-war levels. After Iran closed the strait in March, transits recovered to over 20 vessels per day during the June-July agreement period but have since dwindled again following its expiry. With the addition of "restricted zones and new navigation maps," a capacity recovery appears distant.
Institutional Outlook: The Debate Centers on Disruption Duration
Goldman Sachs has issued the most assertive call yet. On September 7, the co-head of commodities research, Daan Struyven, warned that oil prices could surge to $120 per barrel if Middle East tanker attacks escalate, recommending long positions on natural gas and diesel. The same day, Goldman raised its December 2026 Brent forecast by $5 to $85 per barrel and WTI to $80, citing the potential for shipping disruptions to persist into 2027. However, Goldman also cautioned that unless there is large-scale damage to Middle East oil infrastructure, the upside for prices is limited. Actual Persian Gulf exports remain well above public figures, as more tankers switch off transponders to evade tracking, and OECD commercial inventories still offer resilience. These factors, along with the buffer provided by "dark ships," are expected to temper any price spikes.
Summary and Technical Analysis
Iranian exports are severely impaired by the US blockade and mutual attacks, while the obstruction of the Strait of Hormuz raises friction costs for the entire Gulf's export capacity. With no significant contraction in demand, the expectation of a supply-demand gap is pushing prices higher. In this delicate balance between crude supply and demand, the Houthi's marginal action has provided a powerful boost to bullish price expectations. However, it's observable that any attack or conflict in the international arena requires justification, a logic and rationale to back it. The Saudi bombing of a Houthi prison and other events have indeed triggered a humanitarian crisis, and the market is watching how Riyadh addresses this. Without such redress, the Houthis would have no further pretext to continue attacks on Saudi oil facilities. The core issue remains transportation, not production capacity, and the Houthis are unlikely to fully close the Bab el-Mandeb. Therefore, the impact on oil prices is likely to be a pulse, not a sustained trend, unless Saudi Arabia declares a halt in production or the conflict escalates dramatically.
On the technical front, international oil prices are experiencing significant volatility today. The current rally is approaching the Fibonacci 0.618 retracement level near 94.82, which coincides with a previous dense trading zone, creating considerable resistance. Support is seen near 91, another recent high-volume area. If prices do not retrace to the 91 level in the short term, the uptrend could continue. At 16:33 Beijing time, WTI crude oil futures were trading at $94.54 per barrel.
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