Houthis’ advance at Bab al-Mandeb threatens vital route for global oil and trade.
LONDON—A series of territorial gains by the Houthi rebels along Yemen’s Red Sea coast has raised risks to one of the world’s most critical maritime chokepoints, adding to pressure on global oil markets already unsettled by the conflict involving Iran and the United States.
The Iran-backed Houthi movement captured the port city of Mocha on Sept. 10 and advanced toward the Bab al-Mandeb Strait. Yemeni government forces have then pulled out of Perim Island, also known as Mayun Island, a strategically situated island in the middle of the waterway.
The developments do not necessarily mean full control of the strait, but they put the Houthis in a stronger position from which to threaten shipping through the narrow passage connecting the Red Sea with the Gulf of Aden.
This is all the more important because the wider US-Iran conflict has badly disrupted traffic through the nearby Strait of Hormuz. Therefore, Saudi Arabia and other energy-exporting countries have been under more pressure to use alternative routes to transport oil to international markets. Latest shipping data point to a steep slowdown in flows through both Hormuz and Bab al-Mandeb as regional conflict deepens.
Oil flows under strain.
Before the current conflict, the Strait of Hormuz was a major artery for the world’s oil trade. The disruption has forced producers, traders, and refiners to look for alternative routes and supplies.
Saudi Arabia has increasingly used its East-West pipeline to transport crude from its eastern oil fields to Yanbu on the Red Sea. From there, ships could get to international markets via the Red Sea and Bab al-Mandeb.
Houthi forces have pushed further south along Yemen’s western coastline, heightening the danger posed by that route.
Energy analysts have warned lower flows through Bab al-Mandeb could leave refiners, especially in Asia, scrambling for crude from elsewhere. Longer routes for shipping also increase the cost of freight, insurance, and financing.
Tankers have to go around the Cape of Good Hope to avoid the Red Sea altogether, adding substantial distance and transit time for voyages between the Middle East and Asian markets.
The disruption, therefore, is not merely a question of the mobility of oil. It is also a question of how much extra time and money is needed to deliver it.
Oil prices hit the $100 mark.
The growing disruption has already pushed oil prices higher.
Brent crude and West Texas Intermediate both surged on the latest Houthi advances, with prices jumping above $100 a barrel amid fears of supply disruptions across multiple major energy corridors.
Analysts gave several reasons for the rise, including less shipping through the Red Sea, strains on Saudi oil infrastructure, Strait of Hormuz-related disruptions, and attacks on Russian energy infrastructure.
The net effect is more uncertainty for refiners and traders.
“If disruptions continue, then refiners are being forced to look for more crude,” said Johannes Rauball, a senior crude analyst at Kpler, according to the source.
A bigger threat to global trade
Bab al-Mandeb is important for more than just oil.
The strait links the Red Sea to the Gulf of Aden and is the maritime link between the Indian Ocean and the Suez Canal. Disruptions can therefore affect container shipping, energy cargoes, and other commercial traffic travelling between Asia and Europe.
The latest Houthi gains come after years of attacks and threats to commercial shipping in the Red Sea. The broader territorial presence on the Yemeni coast could complicate maritime security, particularly if the group attempts to enforce limitations on ships affiliated with Saudi Arabia or other countries participating in the regional conflict.
The challenge for global markets is the concurrent deterioration of key trade routes.
Hormuz is badly disrupted, and Bab al-Mandeb is facing renewed security threats, forcing companies to consider longer routes, higher costs, and more uncertainty.
The immediate question is whether the Houthis can hold their new positions and whether regional or international forces will attempt to push them back.
For oil markets, however, the message is already clear: disruption at one chokepoint is hard enough to absorb. At the same time, disruption at several could have much wider implications for prices, shipping, and global trade.
