The attack marks a significant escalation in the Houthis' campaign against Saudi shipping and threatens to further disrupt tanker traffic through the Bab el-Mandeb Strait, a critical chokepoint linking the Red Sea to the Gulf of Aden. A declared closure of the strait to Saudi flagged tankers, combined with reports that nearly ten vessels have already diverted, points to rising freight and insurance costs and could prompt shippers to reroute around the Cape of Good Hope. The threat to strike Saudi oil refineries directly raises the stakes considerably, given the kingdom's role as the world's largest oil exporter, and is likely to add a fresh risk premium to crude prices. Markets will be watching closely for any Saudi response and whether the Houthis follow through on threats against onshore energy infrastructure.---Earlier:UK military report yet another tanker has been struck, this time in the Red SeaThe Houthis have escalated their campaign against Saudi shipping, striking two tankers and threatening to hit Saudi oil refineries next.Summary:Houthis say they struck Saudi oil tankers Encelia and Layla in the Red Sea with ballistic missiles, cruise missiles and dronesBoth vessels reportedly suffered massive firesHouthis declare the Bab el-Mandeb Strait fully closed to all Saudi tankersNearly 10 additional ships forced to abandon their routes and turn backHouthis reaffirm a blockade in exchange for blockade policy against Saudi ArabiaYemeni Armed Forces warn of deep strikes inside Saudi territory, including oil refineries, if attackedYemen's Houthi movement said it had struck two Saudi oil tankers in the Red Sea, identified as the Encelia and the Layla, using a combination of ballistic missiles, cruise missiles and drones, causing what it described as massive fires on both vessels. Houthi military spokesman Yahya Sareea announced the attack and declared the Bab el-Mandeb Strait fully closed to all Saudi flagged tankers going forward.According to the Houthi statement, the attack prompted nearly ten additional vessels to abandon their planned routes and turn back rather than risk transiting the area. Sareea reaffirmed the group's stance of a blockade in exchange for blockade, signalling that Houthi forces intend to continue naval operations targeting Saudi Arabia in what they frame as retaliation for Saudi actions against Yemen.In a separate statement, the Yemeni Armed Forces warned that any military action taken against Yemen would be met with extensive operations deep inside Saudi territory, explicitly naming oil refineries among the potential targets. The warning represents a marked escalation in rhetoric, extending the threat beyond shipping lanes to Saudi Arabia's onshore energy infrastructure, a core pillar of the kingdom's oil export capacity and broader economy.The Bab el-Mandeb Strait is one of the world's most strategically important maritime corridors, linking the Red Sea to the Gulf of Aden and serving as a critical route for vessels moving between Europe, the Suez Canal and markets in Asia. Repeated Houthi attacks on shipping in the area since 2023 have already forced many carriers to reroute around the southern tip of Africa, adding significant time and cost to voyages. A declared closure targeting Saudi tankers specifically, if sustained, would mark a further narrowing of safe passage through the strait and add to an already elevated risk environment for regional shipping. Attention now turns to how Riyadh responds and whether the Houthis follow through on their threat to extend strikes onto Saudi soil. This article was written by Eamonn Sheridan at investinglive.com.