Economy Talk

The second chokepoint: why oil at $100 is about more than one tanker attack

Quick accountant's breakdown of the GONOM post, because the numbers are the story. Hormuz is still effectively closed after the US-Iran ceasefire collapsed in June. Saudi Arabia rerouted about 75% of its usual exports through the pipeline to Yanbu on the Red Sea, with roughly 2.5m barrels a day then going south through Bab al-Mandab.

So when the Houthis hit Saudi tankers and announce a blockade of that exact route, the market isn't pricing one attack, it's pricing the loss of the backup plan. That's why Brent went from about $71 at the start of July to over $100. The IEEFA quote nails it: "That was a safety lever, but that's now gone."