The Houthis Announced An Embargo Of Saudi Oil In The Red Sea. They Began Enforcing it Forcefully

Iran's Houthi allies said on Thursday they struck two Saudi tankers as part of their embargo of the country's oil in the Red Sea.

They are the first such strikes in the key waterway, which the group is now seeking to control as the war in Iran continues to escalate.

Tehran has vowed to manage traffic through the Strait of Hormuz as well and has been targeting vessels seeking to make it through without coordinating with its forces.

Oil jumped following the news. Brent crude, the international benchmark, climbed about 5% and stood just below $100 per barrel on Thursday morning, while West Texas Intermediate, the U.S. benchmark, climbed about 4.5% and stood at $90.73 per barrel.

Reuters detailed on Wednesday that seven vessels heading to Asia had already reversed course since the announcement earlier this week. The group, which operates in Yemen, said on Monday that the decision is based on the "equation of 'an eye for an eye'" and will "respond to all escalation with all escalation, thus solidifying this equation."

It went on to threaten Riyadh further, saying it is ready "for all options, and any foolish act committed by the reckless Saudi enemy through all escalation will be met with a comprehensive and decisive escalation by Allah's will and power."

CNBC noted that Saudi Arabia has been diverting millions of barrels of oil per day from the Strait of Hormuz to the Red Sea as a result of the war. The Houthis preventing Riyadh from doing so further exacerbates the disruption taking place in oil markets.

Traffic has plummeted further in the Strait of Hormuz. Citing data from Lloyd's List Intelligence, CNBC detailed that only 53 vessels crossed the key waterway in the week through July 20, a 66% drop compared to the previous week.

Data from Kpler also shows that traffic dropped right after hostilities began again, with Iran striking vessels not going through the route approved by Tehran. Daily crossings had averaged more than 20 before July 15 but have dropped to the single digits last week.

Tensions continue to escalate in the meantime. Secretary of State Marco Rubio said that the price Iran will pay "will get higher every night" until Tehran is ready to make a meaningful peace agreement.

"Iran is begging (for a deal) every day. The problem with Iran is every time they make a deal ... they either break it or they want to change it," Rubio said. "So now they're paying the price for it. And maybe they'll ​change their mind here over the next few days as they continue to suffer great losses."