Oil surges as Houthi missiles hit Riyadh for a second day

Oil prices surged after a second day of Houthi strikes on Riyadh, with the missile attacks coming as Iran increased the pace of its attacks on vessels in the Strait of Hormuz¹. The Houthis claimed a new attack against the airport in the Saudi capital, and a witness reported an evacuation⁵. Airlines suspended flights⁸. Saudi Arabia said it intercepted Houthi missiles targeting Riyadh⁹.

US stock futures headed lower after the explosions in the Saudi capital sent crude prices racing higher⁶. Crude gained 5 percent as Treasury yields continued to climb³. Reuters reported oil jumping on persistent Middle East supply concerns amid shipping attacks in the Gulf and the Strait of Hormuz, with US output also cut as a hurricane menaced offshore production⁴. The campaign follows the fighting that intensified around the Bab el-Mandeb strait, which Iran-backed Houthi rebels besieged, disrupting shipping⁶.

Why it matters to investors

Freight is where the war is now priced. The cost of hiring one very large crude carrier to move US oil to Asia topped $77 million, according to data published on Wednesday². That is a charter market repricing the risk of the voyage itself, and it lands on refiners and importers before it reaches pump prices.

The strikes also change the target set. Shipping lanes and chokepoints have been the focus of the conflict, but missiles reaching Riyadh and its airport move the risk onshore, toward the infrastructure that moves and exports Saudi crude. The Saudi-led coalition said the Houthi attacks on Saudi Arabia will not go unpunished, which points to escalation rather than containment⁷. Houthi leader Abdul Malik al-Houthi accused Saudi Arabia of turning the area around the Bab el-Mandeb into a war zone, and said the group would continue^5,9.

What to watch

The first measure is the charter market rather than the spot crude price. A very large crude carrier above $77 million for a single US-to-Asia voyage is the clearest signal of how shipowners are pricing the chance of attack, and it will move before supply is actually interrupted².

The second is air traffic to the Gulf. Flight suspensions by airlines serving Riyadh are a direct cost to carriers and a marker of how durable operators judge the threat to be⁸. The third is the coalition’s promised response⁷, set against a second supply constraint already in play: the hurricane that curbed US offshore output at the same time as the Gulf attacks⁴.