![Houthi Rebels Report Strikes on Two Saudi Oil Tankers in Red Sea</TITLE]Yemen’s Iran-aligned Houthi rebels have claimed responsibility for attacking two Saudi Arabian oil tankers navigating the Red Sea.Houthi military spokesperson Yahya Saree stated on Wednesday, “We targeted two Saudi oil tankers, named ENCELA and LAYLIA, for their violation of the blockade decision issued by the armed forces.”Saree noted that the operation utilized a combination of drones, cruise missiles, and ballistic missiles.While Saudi Arabia has yet to issue a formal response, the United Kingdom Maritime Trade Operations (UKMTO) confirmed receiving reports of a strike. According to the UKMTO, a vessel’s master reported being hit by an unidentified projectile, resulting in an onboard fire that the crew is currently working to extinguish.The escalation follows the Houthi movement’s decision on July 20 to impose a maritime blockade on Saudi Arabia. This move comes amidst heightened volatility in Yemen, following recent airstrikes by the Yemeni government on Sanaa Airport intended to intercept Iranian flights.Saudi Arabia has consistently denied Houthi allegations regarding a siege on the Yemeni population. Additionally, critics of the Houthi movement have highlighted their refusal to accept a Jordanian proposal to restore flight connections between Amman and Sanaa.As the US-Israel conflict with Iran has caused significant disruptions in the Strait of Hormuz, Saudi Arabia has sought to utilize alternative routes through the Red Sea and the Bab al-Mandeb Strait to maintain oil supplies. However, these routes are now facing direct threats from Houthi operations.The Houthi campaign against shipping in the Bab al-Mandeb Strait began in October 2023, following the start of the conflict in Gaza, and continued through the announcement of a Gaza ceasefire in October 2025.The Bab al-Mandeb Strait serves as a vital global maritime artery, linking the Red Sea to the Gulf of Aden. At its narrowest, the chokepoint is only 29km wide, restricting traffic to two channels for vessels moving toward or away from the Suez Canal.In 2024, approximately 4.1 billion barrels of crude and refined petroleum products—roughly five percent of the global supply—traversed this strait. Given the effective closure of the Strait of Hormuz due to the US-Israel war with Iran, any closure of the Bab al-Mandeb could potentially obstruct up to 25 percent of the world’s oil and gas supply.](https://i2.wp.com/www.aljazeera.com/wp-content/uploads/2026/07/ap_6a613e7ed9b96-1784757886.jpg?resize=1920%2C1440&w=1024&resize=1024,1024&ssl=1 "Houthi Rebels Report Strikes on Two Saudi Oil Tankers in Red Sea</TITLE]Yemen’s Iran-aligned Houthi rebels have claimed responsibility for attacking two Saudi Arabian oil tankers navigating the Red Sea.Houthi military spokesperson Yahya Saree stated on Wednesday, “We targeted two Saudi oil tankers, named ENCELA and LAYLIA, for their violation of the blockade decision issued by the armed forces.”Saree noted that the operation utilized a combination of drones, cruise missiles, and ballistic missiles.While Saudi Arabia has yet to issue a formal response, the United Kingdom Maritime Trade Operations (UKMTO) confirmed receiving reports of a strike. According to the UKMTO, a vessel’s master reported being hit by an unidentified projectile, resulting in an onboard fire that the crew is currently working to extinguish.The escalation follows the Houthi movement’s decision on July 20 to impose a maritime blockade on Saudi Arabia. This move comes amidst heightened volatility in Yemen, following recent airstrikes by the Yemeni government on Sanaa Airport intended to intercept Iranian flights.Saudi Arabia has consistently denied Houthi allegations regarding a siege on the Yemeni population. Additionally, critics of the Houthi movement have highlighted their refusal to accept a Jordanian proposal to restore flight connections between Amman and Sanaa.As the US-Israel conflict with Iran has caused significant disruptions in the Strait of Hormuz, Saudi Arabia has sought to utilize alternative routes through the Red Sea and the Bab al-Mandeb Strait to maintain oil supplies. However, these routes are now facing direct threats from Houthi operations.The Houthi campaign against shipping in the Bab al-Mandeb Strait began in October 2023, following the start of the conflict in Gaza, and continued through the announcement of a Gaza ceasefire in October 2025.The Bab al-Mandeb Strait serves as a vital global maritime artery, linking the Red Sea to the Gulf of Aden. At its narrowest, the chokepoint is only 29km wide, restricting traffic to two channels for vessels moving toward or away from the Suez Canal.In 2024, approximately 4.1 billion barrels of crude and refined petroleum products—roughly five percent of the global supply—traversed this strait. Given the effective closure of the Strait of Hormuz due to the US-Israel war with Iran, any closure of the Bab al-Mandeb could potentially obstruct up to 25 percent of the world’s oil and gas supply.")
September arabica coffee (KCU26) closed down -5.45 (-1.69%) on Wednesday, while September ICE robusta coffee (RMU26) fell by -22 (-0.58%).
Coffee prices retreated on Wednesday, with robusta dropping to a two-week low. Market sentiment is currently pressured by forecasts of dry conditions across Brazil’s primary coffee-growing regions over the coming week, which is expected to accelerate the country’s harvest. Additionally, rising inventory levels are weighing on robusta coffee, following a climb to a four-month high for ICE robusta inventories on Wednesday.
On July 6, arabica coffee hit a 5.75-month high, and robusta similarly reached a 5.75-month peak on July 7, driven by delayed harvesting in Brazil. However, since reaching those peaks earlier this month, prices have fluctuated within a wide range due to illiquid trading conditions, leading to significant volatility. This market instability is compounded by recent Intercontinental Exchange (ICE) increases in margin requirements for coffee futures, which has reduced liquidity and prompted commodity funds to close positions, resulting in sharp, one-way price movements.
The current pace of Brazil’s coffee harvest remains a supportive factor for prices. According to Safras & Mercado, the 2026/27 Brazilian coffee harvest was 64% complete as of July 15, trailing the 77% recorded during the same period last year and the five-year average of 70%.
Coffee prices surged over the past month due to heavy rains in Brazil, which disrupted fieldwork and threatened crop quality. Furthermore, many Brazilian farmers are limiting sales in anticipation of higher prices and as a precaution against potential El Niño weather patterns.
ICE coffee inventories have trended lower over the last quarter, providing some price support. ICE arabica inventories reached a 2.25-year low of 320,615 bags on Wednesday. In contrast, ICE robusta inventories, which reached a 2.25-year low of 3,631 lots on May 15, rose to a four-month high of 4,254 lots on Wednesday.
Recent strength in Brazilian coffee exports is acting as a bearish influence. Cecafe reported that Brazil’s green coffee exports for June rose by 14.4% year-over-year to 2.64 million bags last Wednesday.
Conversely, concerns regarding El Niño’s potential impact on next year’s Brazilian crop are bullish. Trader Commercial suggested that El Niño could delay rains in Brazil this September and October—a critical period for tree flowering—potentially damaging the 2026/27 crop.
On July 8, the US Climate Prediction Center indicated that the El Niño pattern emerging in the equatorial Pacific could be one of the strongest in 75 years. This increases the likelihood of floods, droughts, and temperature fluctuations later this year, which could disrupt coffee production in both Asia and South America.
Somar Meteorologia reported on Monday that Minas Gerais, Brazil’s largest coffee-producing region, received only 0.2 mm of rain—just 20% of the historical average—during the week ending July 19.
On June 9, arabica coffee hit a 20.5-month low and robusta hit a 3.5-month low amid expectations of a bumper Brazilian crop. On June 3, the USDA’s Foreign Agricultural Service (FAS) projected a record 71.9 million bag Brazilian coffee crop for 2026/27, representing a 14% year-over-year increase. Additionally, Rabobank raised its global arabica coffee surplus estimate for that period to 9.5 million bags, up from 7.0 million bags.
Robust inflation in exports from Vietnam, the world’s leading robusta producer, is also pressuring prices. Vietnam’s National Statistics Office reported that coffee exports for the first half of 2026 rose 7.3% year-over-year to 1.05 MMT. Furthermore, 2025 coffee exports grew 17.5% to 1.58 MMT, with 2025/26 production expected to reach a four-year high of 1.76 MMT (29.4 million bags).
As a further bearish indicator, the International Coffee Organization (ICO) reported on November 7 that global coffee exports for the current marketing year (Oct-Sep) fell 0.3% year-over-year to 138.658 million bags.
The USDA’s FAS bi-annual report from December 18 projected that global coffee production for 2025/26 will rise 2.0% to a record 178.848 million bags. This includes a 4.7% decrease in arabica production to 95.515 million bags and a 10.9% increase in robusta to 83.333 million bags. FAS also forecasts that Brazil’s 2025/26 production will drop 3.1% to 63 million bags, while Vietnam’s output will rise 6.2% to 30.8 million bags. Global ending stocks for 2025/26 are projected to fall by 5.4% to 20.148 million bags.
Also Read
- Houthi Rebels Report Strikes on Two Saudi Oil Tankers in Red Sea</TITLE]Yemen’s Iran-aligned Houthi rebels have claimed responsibility for attacking two Saudi Arabian oil tankers navigating the Red Sea.Houthi military spokesperson Yahya Saree stated on Wednesday, “We targeted two Saudi oil tankers, named ENCELA and LAYLIA, for their violation of the blockade decision issued by the armed forces.”Saree noted that the operation utilized a combination of drones, cruise missiles, and ballistic missiles.While Saudi Arabia has yet to issue a formal response, the United Kingdom Maritime Trade Operations (UKMTO) confirmed receiving reports of a strike. According to the UKMTO, a vessel’s master reported being hit by an unidentified projectile, resulting in an onboard fire that the crew is currently working to extinguish.The escalation follows the Houthi movement’s decision on July 20 to impose a maritime blockade on Saudi Arabia. This move comes amidst heightened volatility in Yemen, following recent airstrikes by the Yemeni government on Sanaa Airport intended to intercept Iranian flights.Saudi Arabia has consistently denied Houthi allegations regarding a siege on the Yemeni population. Additionally, critics of the Houthi movement have highlighted their refusal to accept a Jordanian proposal to restore flight connections between Amman and Sanaa.As the US-Israel conflict with Iran has caused significant disruptions in the Strait of Hormuz, Saudi Arabia has sought to utilize alternative routes through the Red Sea and the Bab al-Mandeb Strait to maintain oil supplies. However, these routes are now facing direct threats from Houthi operations.The Houthi campaign against shipping in the Bab al-Mandeb Strait began in October 2023, following the start of the conflict in Gaza, and continued through the announcement of a Gaza ceasefire in October 2025.The Bab al-Mandeb Strait serves as a vital global maritime artery, linking the Red Sea to the Gulf of Aden. At its narrowest, the chokepoint is only 29km wide, restricting traffic to two channels for vessels moving toward or away from the Suez Canal.In 2024, approximately 4.1 billion barrels of crude and refined petroleum products—roughly five percent of the global supply—traversed this strait. Given the effective closure of the Strait of Hormuz due to the US-Israel war with Iran, any closure of the Bab al-Mandeb could potentially obstruct up to 25 percent of the world’s oil and gas supply.
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