Yemen's Houthi rebels have escalated their attacks in the Red Sea, targeting Saudi oil tankers and infrastructure, threatening a vital shipping lane that has become increasingly important for global energy markets. The July 20 declaration of a "blockade" against Saudi Arabia by the Iran-backed group, followed by attacks on two Saudi oil tankers, has caused several crude oil shipments to alter course.
This development poses a significant risk to the global energy industry, as the Red Sea route serves as a crucial alternative to the Strait of Hormuz, which has faced disruptions due to the ongoing conflict involving Iran. Saudi Arabia has rerouted approximately 70 percent of its oil exports through a pipeline to the Red Sea port of Yanbu, making the Bab el-Mandeb Strait, which connects the Red Sea to the Gulf of Aden, a critical artery for energy supplies to Asia. The Red Sea route now accounts for about 7 percent of the world's energy supplies.
The Houthis, who are part of Iran's "Axis of Resistance" but are believed to operate with some independence, have their own agenda that extends beyond the immediate Iran conflict. Their recent actions have created leverage, increasing oil prices to over $100 a barrel and potentially complicating efforts to de-escalate regional tensions. President Donald Trump has vowed military retaliation against the Houthis and Iran.
Houthi Objectives and Regional Dynamics
The Houthis, officially known as Ansar Allah, are a Zaydi Shia minority group that has been fighting for control of Yemen since the 1990s. Following a decade-long conflict with a Saudi-led coalition that ended in a 2022 ceasefire, the group had largely maintained a period of relative quiet. However, they began actively participating in the wider regional conflict in March with missile launches targeting Israel, and intensified their campaign in mid-July following an attack on Sanaa airport, which they attributed to Saudi Arabia.
In addition to attacking oil tankers, the Houthis claimed responsibility for an assault on a Saudi oil refinery and oil depots along the Red Sea coast. This marks a significant shift, as the group has not previously targeted Saudi energy infrastructure since 2022. Analysts suggest the Houthis are seeking leverage, with demands that include billions in reparations and greater control over Yemen's coastline and airspace, aiming for international recognition as Yemen's legitimate government.
A "Double Chokehold" on Energy Supplies
The current situation has created what shipping experts term a "double chokehold" on Middle Eastern energy. With traffic through the Strait of Hormuz restricted and the Bab el-Mandeb Strait now under threat, the global oil industry faces mounting pressure. While the Bab el-Mandeb has not been completely closed, shipping traffic has decreased, and insurers are wary of the risks. The Houthis' past campaigns in the Red Sea, where they broadly defined targets, have led many operators to hesitate using the route.
Experts warn of further escalation, noting that Iran has reportedly urged the Houthis to close the Bab el-Mandeb entirely if the United States launches airstrikes against Iran's power network. This potential closure of a critical energy chokepoint could significantly impact oil prices, testing the adaptability of the global oil industry. While oil can still be rerouted around Africa via the Suez Canal, this is a more complex and time-consuming process, especially for fully loaded supertankers.
The ongoing disruptions highlight the growing vulnerability of global supply chains to weaponized chokepoints. While the oil and shipping industries have historically adapted to temporary disruptions, the increasing number of conflicts and the strategic use of these chokepoints by various actors raise concerns about potential breaking points within the global economic system.