The Houthis have announced their intention to impose a naval blockade against Saudi Arabia, marking a significant deterioration in the Middle East risk outlook.

Oil prices have pulled back below $88 per barrel from around $91 as traders focus on Qatar’s proposed ten-day ceasefire and an easing of Hormuz shipping restrictions.

Rystad Energy cautions that the price decline reflects diplomatic optimism rather than any meaningful improvement in the physical supply picture.

The Strait of Hormuz remains almost at a standstill, and Saudi Arabia’s Red Sea export route, which has been carrying the bulk of Gulf crude to market, is now directly in the line of fire.