Saudi oil tankers are taking the long way around Africa, steering clear of the Red Sea after Houthi forces threatened to blockade key shipping lanes. The rerouting via the Cape of Good Hope adds days to each voyage and pushes up costs, even as prediction markets see only a 1.8% chance of West Texas Intermediate crude hitting $110 a barrel next July.
Why the Cape of Good Hope
The Houthi group, which controls large parts of Yemen, has warned it will target vessels linked to Israel or those heading to Israeli ports. That threat extends to the Bab el-Mandeb strait, a narrow chokepoint between the Red Sea and the Gulf of Aden. For Saudi tankers, the risk of attack or delay has made the longer route around southern Africa the safer bet. The detour adds roughly 3,500 nautical miles to a typical journey from the Persian Gulf to Europe, stretching transit times by a week or more.
What the Prediction Market Says
One prediction market currently puts the odds of WTI crude reaching $110 per barrel in July 2026 at just 1.8%. That's a low probability, but it's not zero. The figure reflects some traders' belief that supply disruptions — like the Houthi blockade — could tighten the market enough to push prices that high. For context, WTI has traded in the $70–$90 range for much of the past year. A move to $110 would require a serious supply shock or a surge in demand.
The Cost of Going the Long Way
Longer routes mean higher fuel bills, more crew time at sea, and less capacity in the global tanker fleet. Each extra day at sea ties up a vessel that could otherwise be making another trip. That inefficiency can ripple through the oil supply chain, especially if the rerouting becomes a long-term pattern. So far, the shift has been gradual, but the Houthi threats show no sign of easing.
For now, the tankers keep sailing south. The question is how long the detour will last — and whether the market's low odds of a price spike will hold.
