Brent Hits $100: Houthis Open a Second Oil Chokepoint as the Tariff Wall Rebuilds

Brent crude crossed $100 a barrel on July 23 after Yemen’s Houthis struck two Saudi oil tankers in the Red Sea, opening a second chokepoint on top of the already-restricted Strait of Hormuz^[1]. The strike came as the Trump administration pivots from expiring blanket tariffs to more durable Section 301 duties on 60 trading partners^[2], layering a trade-policy shock on top of an energy-supply crisis that the market is still pricing in.

The Two-Chokepoint Problem

The Red Sea tanker attacks are not a one-off. The Houthis declared a “maritime embargo” against Saudi Arabia on Monday, and ship-tracking data from BBC Verify shows at least seven oil tankers making U-turns near Yemen within hours^[3]. The EU’s naval force Aspides has advised vessels linked to Israeli, US, or Saudi interests to avoid the Red Sea and Gulf of Aden entirely^[3].

This matters enormously because Saudi Arabia had already rerouted more than 70% of its crude exports away from the Gulf — where the Strait of Hormuz has been effectively closed since the US-Iran war intensified — and through the Red Sea port of Yanbu via an east-west pipeline. About four million barrels per day have been shipped from Yanbu in recent weeks, up from roughly 973,000 a year earlier^[3]. If the Bab al-Mandeb Strait is compromised too, the only remaining route for Saudi crude to Asian buyers is a weeks-long detour around the southern tip of Africa.

Iran, for its part, warned that it would retaliate against US-linked infrastructure across the region if Washington follows through on Trump’s threat to destroy an Iranian bridge or power plant for each tanker attack^[1]. “If the Americans target a bridge or a power plant in Iran, Iran will, in turn, strike infrastructure and bridges in the region, including energy facilities where the United States has interests,” an Iranian military source told state-run Tasnim News Agency^[1].

Oil Market Response

Brent futures crossed $100 per barrel for the first time since May 26, trading up roughly 7% at $100.70 by late morning ET. West Texas Intermediate advanced about 6% to $92.25^[1]. Oil has surged more than 30% this month alone^[1].

RBC Capital Markets’ Helima Croft flagged that pressure is building toward a scenario where Brent could exceed the 2022 post-Ukraine-invasion high of $128, or even the 2008 peak of $146 in a worst-case regional war^[1]. The Ukraine conflict is compounding the squeeze: Kyiv has attacked more than 150 tankers in the Black Sea and Sea of Azov this month, forcing the Caspian Pipeline Corporation to stop loading crude at its Black Sea terminal — a line that carries roughly 80% of Kazakhstan’s exports^[1].

Equities: Energy Up, Tech Down

The oil-price surge lifted major integrated names. ExxonMobil (XOM) closed up 1.9% at $157.37^[4], Chevron (CVX) rose 1.6% to $196.16^[4], and ConocoPhillips (COP) gained 2.3% to $121.57^[4]. Tanker stocks were more muted — Scorpio Tankers (STNG) edged up 0.4% to $78.79^[4], and Frontline (FRO) rose 1.5% to $38.53^[4] — suggesting the market is pricing sustained disruption but not yet a full freight-rate spike.

Meanwhile, the tech earnings complex delivered its own shock. Alphabet (GOOGL) fell 6.0% to $321.49 despite a revenue beat, after management guided to steeper AI infrastructure spending^[4]. Tesla (TSLA) plunged 12.9% to $325.59^[4]. The broader S&P 500 slipped 0.14% to 7,498.96 on Wednesday^[5], though the index’s dip was modest relative to the geopolitical noise — a sign that dip buyers remain active even as Middle East risk escalates^[5].

The Tariff Pivot

While oil dominates the headlines, the trade-policy calendar is equally consequential for risk assets. The temporary 10% global tariff imposed under Section 122 of the Trade Act of 1974 is set to expire Friday at 12:01 a.m. ET unless Congress intervenes^[2]. But the administration has already laid the groundwork to replace it.

In early June, USTR proposed Section 301 duties of up to 12.5% on imports from 60 economies, framed as a response to alleged forced-labor practices^[2]. Greer confirmed on CNBC that “we expect to see some action soon”^[2]. The 301 route is expected to be more legally durable than the IEEPA-based “reciprocal” tariffs the Supreme Court struck down in February^[2].

On top of that, 25% tariffs on most Brazilian imports took effect Wednesday^[2], and Trump signed proclamations for 50% tariffs on a range of Canadian goods to take effect in 30 days^[2]. Canadian Prime Minister Mark Carney called the 50% tariffs a direct violation of the USMCA^[2].

The forced-labor framing matters for durability. “It’s much harder for a future presidential administration to roll back tariffs that are intended to help combat forced labor,” Tiffany Smith of the National Foreign Trade Council told CNBC^[2]. Blake Harden of Washington Council Ernst & Young was blunter: “Politically, it’s very hard to walk these things back once they’re in place”^[2].

What to Watch Next

• Bab al-Mandeb traffic data. Watch Kpler and MarineTraffic for whether tanker reroutings accelerate from the current seven confirmed U-turns. A sustained drop below baseline transit volumes would signal de facto closure.

• Trump’s “massive attack” decision. The president told Axios he is “close to making a decision” on a strike against Iran^[1]. An escalation to strikes on Iranian energy infrastructure would mark a step-change in supply risk.

• Strait of Hormuz status. Iran’s Revolutionary Guards have claimed the strait is “completely closed”^[6]. Any verification of tanker traffic resuming — or further interdiction — moves Brent in either direction.

• Section 301 announcement timing. Greer said to expect action “soon”^[2]. An announcement this week, coinciding with the Friday expiry of Section 122 duties, would mean the tariff wall is reconstituted without a gap. Watch for the specific country-by-country rate schedule.

• Kazakhstan CPC pipeline. The Black Sea terminal shutdown affects ~1.7 million barrels per day of Kazakh crude^[1]. Duration of the closure and any shut-in production announcements will tighten the global supply balance further.

• US House war-powers vote. The House has approved a bid to limit the president’s authority to wage war against Tehran^[7]. Senate passage and White House response could constrain the escalation ladder — or trigger a constitutional confrontation.

The Base-Rate Read

What would have to be true for this to de-escalate rather than spiral? Three things: the Houthis would need to limit their embargo to Saudi-flagged vessels rather than all Red Sea traffic; Iran would need to step back from its “eye for an eye” infrastructure threat; and the Trump administration would need to accept a face-saving off-ramp rather than executing the “massive attack” it has previewed. Each is individually possible; all three simultaneously is a low-probability outcome. The base rate of Middle East shipping disruptions since the Gaza war began in October 2023 suggests these episodes last weeks to months, not days. Oil at $100 is the market pricing a sustained disruption, not a transient one.