The Bab al-Mandeb Strait is emerging as a new flashpoint for global oil and shipping markets as Iran-backed Houthi forces intensify threats to maritime traffic and tighten their grip over territory surrounding the strategic waterway. Located between Yemen and Djibouti at the entrance to the Red Sea, the narrow strait has gained renewed importance following the effective closure of the Strait of Hormuz, a route that previously carried about 20 million barrels of oil a day, or roughly one-fifth of global supply.
The Houthis have stepped up attacks and threats against shipping as the US-Iran war enters its seventh month, seeking to open another front in the conflict and increase pressure on regional and international trade routes. In the past 48 hours, the Houthis reportedly captured the port city of Mocha and, according to Yemeni government sources, Perim Island, which lies in the middle of the Bab al-Mandeb chokepoint, according to CNN.
The developments have heightened concerns over the movement of oil through the Red Sea, particularly after Saudi Arabia sought to compensate for the disruption in Hormuz by diverting crude through its East-to-West pipeline to the Red Sea port of Yanbu. Yanbu exports reached about 4.5 million barrels per day at their peak, while roughly 3 million barrels per day would normally pass through Bab al-Mandeb. However, Saudi crude shipments through Bab al-Mandeb fell sharply to about 400,000 barrels per day in August amid Houthi threats and have declined further since.
Avoiding the strait means oil tankers must take a much longer route around Africa and across the Indian Ocean. The diversion can add about a month to transit times while increasing freight, fuel and insurance costs. The disruption is also intensifying competition among Asian refineries for alternative crude supplies, adding further pressure to already-tight global oil markets.
Following reports of the Houthi territorial gains, Brent crude and West Texas Intermediate surged more than 7 percent on Thursday. Brent reached about $108 a barrel, while WTI climbed to around $103, their highest levels since May.
Analysts say the latest oil-price surge reflects several factors, including disruptions to Red Sea shipping, Saudi production cuts and Ukrainian attacks on Russian energy infrastructure. The Bab al-Mandeb developments therefore threaten to compound the disruption already caused by the closure of the Strait of Hormuz, creating additional uncertainty for oil producers, refiners, shipping companies and consumers.
With no immediate resolution in sight, refiners are searching for additional crude supplies as competition intensifies. The resulting pressure on global energy and shipping markets could translate into higher fuel, freight and consumer prices.
The crisis also underscores the growing vulnerability of the world’s energy supply chains to disruptions at strategically important maritime chokepoints, with developments around both Hormuz and Bab al-Mandeb now carrying significant consequences for global markets.
