EVERYTHING IS GOING SWIMMINGLY: Houthi Hit on Russian Fuel Has Oil Traders Recalculating Risks.

Friday’s attack made one thing clear: whatever assurances Yemen’s Houthis offer, they don’t extend to a ship’s cargo if the vessel itself has even a tenuous link to the US, UK or Israel. The Houthis had said they were targeting Israeli assets because of the war in Gaza, and then extended their reach to US and UK vessels after those countries launched airstrikes in Yemen.

The attack means that a greater slice of the 3 million barrels a day of Russian crude oil and fuel that has been flowing through the Red Sea to reach customers in Asia could be at risk. And Russian volumes matter to the global market — despite sanctions imposed because of Moscow’s own war in Ukraine.

It’s true that insurance costs can be so prohibitive that some owners find it more attractive to go the long way around Africa — following container shippers that have already made that call. But, while Friday’s attack redefined the kinds of ships that might be viewed as targets, not all ships will fall into that category. The most likely outcome is that the numbers willing to risk it thins out, but the route doesn’t shut altogether.

The Houthis don’t need to shut down the Red Sea. They just need to keep the price of oil up for their sponsors in Tehran and their buddies in Moscow.