Saudi Arabia faces Red Sea threat as Houthis tighten oil export pressure

Saudi Arabia is facing growing pressure on multiple fronts as Houthi rebels make gains near the Red Sea, drone attacks blamed on Iraqi militias force the closure of a major pipeline, and Iran continues to disrupt the Strait of Hormuz. The developments have raised concern in global markets and deepened fears in Riyadh over the security of its energy exports and shipping routes.

The situation has also exposed Saudi Arabia's limited room for manoeuvre at a time when its closest ally, the United States, appears reluctant to widen an already unpopular and deadlocked war in the Middle East ahead of congressional elections. For Iran, the Houthi advance and the pipeline shutdown add to economic pressure on Saudi Arabia and others in the Gulf as Tehran's hold over the Strait of Hormuz has weakened.

Michael Ratney, a former US ambassador to Saudi Arabia, said the latest developments are "incredibly frustrating" for the kingdom. "Despite their antipathy for the Iranians, this is a war they had never asked for, they had great trepidation about. And once it started, all of their worst-case scenarios started coming true," he said.

The Saudi government did not respond to a request for comment. However, a Saudi official, who was not authorised to brief the media and spoke on condition of anonymity, said the kingdom would defend itself and work with partners, including the United States, to ensure freedom of navigation in the Red Sea.

Saudi Crown Prince Mohammed bin Salman has spent years trying to shape a different Middle East, with sweeping social and economic changes aimed at turning the ultra-conservative kingdom into a global business hub in a more prosperous and integrated region. Those plans suffered major setbacks after Hamas' October 7, 2023 attack on Israel triggered one war after another.

When the US and Israel attacked Iran on February 28, Tehran responded with missile and drone attacks on Saudi Arabia and other Gulf states, and effectively shut down the Strait of Hormuz, trapping their oil and gas exports and jolting the world economy. Saudi Arabia avoided some of the worst effects by sending its oil across the Arabian Peninsula to the Red Sea, from where it could be shipped to Europe through Egypt's SUMED pipeline and the Suez Canal, or to Asia through the Bab el-Mandeb Strait and towards the Indian Ocean.

That alternative route is now under pressure as well. Tensions with the Houthis flared again in July, prompting the rebels to declare a blockade of Saudi shipping and resume large-scale attacks for the first time in four years. Over the last two days, the Houthis have seized the port city of Mokha and a Red Sea island from Saudi-backed Yemeni government forces, strengthening their ability to block Saudi shipments through the Bab el-Mandeb.

On Friday, Saudi Arabia said it had shut down the pipeline running from major oilfields in the east to the Red Sea in the west because of drone attacks originating in Iraq, where Iran backs powerful militias. Regional officials recently told The Associated Press that the Houthis had helped the Iraqi militias carry out attacks.

Houthi attacks have already led to a sharp fall in Saudi oil exports to Asia, from around 3.4 million barrels a day in June to just 128,000 in August, according to figures compiled by Kpler, a global trade monitor. The figure recovered somewhat this month to 700,000 barrels a day.

Saudi Arabia fought the Houthis for years from 2015, but its allies made little progress on the ground. The conflict killed an estimated 150,000 people and at times pushed Yemen to the brink of famine before a 2022 ceasefire. Neil Quilliam, a Middle East expert at Chatham House, said, "Saudi Arabia has spent several years trying to move beyond the Yemen conflict and focus on economic transformation and regional stability." He added, "Recent Houthi gains increase pressure on Riyadh to respond, but every available option carries significant costs and uncertain outcomes."

Sherwan Hindreen Ali, Middle East research manager at ACLED, a conflict monitoring group, said Saudi Arabia could intensify its military response and try to push the Houthis back, but that would prolong the conflict and invite heavier Houthi attacks on Saudi energy infrastructure. "The kingdom already faced this in the past, but Houthi weaponry is more sophisticated now than it was back then, and the Saudis likely have less interceptor missiles available as a result of the US-Iran conflict," he said.

Saudi Arabia could also look for a diplomatic solution with either the Houthis or their backers in Tehran. But the Houthis have demanded the lifting of a Saudi-led blockade, which would allow them to become much stronger over time, while Iran has little interest in stabilising the region without securing major concessions from the US.

For decades, Saudi Arabia and other Gulf states relied on US security guarantees, but those have weakened under President Donald Trump. During his first term, he did not respond when a 2019 attack claimed by the Houthis temporarily knocked out half of Saudi Arabia's oil supply. In February, the US joined Israel in attacking Iran without consulting its Gulf allies, and since then it has struggled to shield them from Iranian attacks.

Trump launched an air campaign against the Houthis last year in response to earlier attacks on Red Sea shipping linked to the war in Gaza. This time, however, US forces are heavily deployed around the Strait of Hormuz, where they are blockading Iran and trying to prevent attacks on shipping there. The fighting has visibly strained the US military and reduced supplies of sophisticated interceptors.

The war is also deeply unpopular and has hurt Trump's support after he promised to keep the US out of Middle East wars. Opening another military campaign in Yemen could add to the problems facing fellow Republicans in closely fought House and Senate contests. The White House did not respond to a request for comment on whether it plans to intervene in Yemen.

Speaking more broadly about the war with Iran on Thursday, Trump brushed aside the idea of increasing military pressure, as some US hawks have suggested. "Maybe I don't do that because of the election," he told Fox News' "The Ingraham Angle." Ratney said it would be difficult for the Saudis to achieve their goals without steady US backing, which they had at earlier stages of the fight against the Houthis. "My understanding at this point is the White House is not enthusiastic about getting involved," he said.

The latest Houthi gains, the pipeline shutdown and the continuing disruption in the Strait of Hormuz have combined to leave Saudi Arabia facing threats to both its security and its export routes, even as US support appears uncertain and Riyadh's options remain costly.