The cost of insuring cargo transported through the Red Sea rose sharply on Monday after Yemen’s Houthis announced a naval blockade of Saudi Arabia, increasing risks for commercial shipping, Reuters reported, citing sources in the insurance industry.

This move by the Houthis opens a new front against the United States as part of their war with Iran and expands the threat to global trade and energy supplies beyond the Persian Gulf.

According to sources, indicative war-risk premiums rose to 0.75% of a vessel’s value, up from about 0.3% on Friday (before the Houthi announcement). Even such a small change means additional costs of hundreds of thousands of dollars for a seven-day voyage.

It remains unclear exactly how the Houthis intend to enforce a naval blockade of their northern neighbor along the Red Sea coast and whether this will lead to a resumption of direct attacks on commercial vessels.

Saudi giant Saudi Aramco, the world’s largest oil exporter, has increased its use of the Yanbu terminal on the Red Sea since the start of the U.S.-Israeli conflict with Iran on February 28.

British maritime security company Ambrey said on Monday that Saudi-flagged vessels, as well as ships owned, operated by, or sailing to and from Saudi Red Sea ports, have been classified as being at high risk of Houthi attack.

“During the Red Sea crisis in 2024, the Houthis made mistakes by attacking ships based on outdated information about company affiliations. It is entirely possible that vessels could be targeted due to mistaken identification,” Ambrey noted.

A complete closure of the Bab el-Mandeb Strait — the southern gateway connecting the Red Sea to the Gulf of Aden — would halt Saudi oil exports to Asia and could reduce global oil supply by 7%.

Shipping traffic in the Red Sea has still not fully recovered since the Houthis began attacks off the coast of Yemen in November 2023, which the group said were in solidarity with Palestinians in the war in Gaza. Some attacks continued until mid-2025 and ceased completely only after a ceasefire was reached in Gaza in October last year.

In addition, in recent months there has been an increase in cases of suspected Somali piracy and vessel seizures in the Gulf of Aden, creating additional dangers for commercial shipping.