Houthis threaten Bab el-Mandeb blockade as U.S.-Iran conflict raises risk of oil shock

Analysts cautioned that a full closure of the Bab el-Mandeb, the southern gateway to the Red Sea, could disrupt petroleum flows of about 7.4 million barrels per day — roughly 7 per cent of global oil output, according to Kpler data cited by Reuters. Such a hit would come on top of an already sharp slowdown of shipping through the Strait of Hormuz, the main outlet for Gulf crude, where the United States and Iran have been exchanging fire for ten days.

Why the strait matters for global oil

Jorge Leon, senior vice-president and head of geopolitical analysis at Rystad Energy, said the Houthis had not yet clarified how the blockade would be enforced. "While the Houthis have not yet clarified how the blockade would be enforced, their previous campaign against commercial vessels demonstrates both the capability and willingness to disrupt Red Sea shipping," Leon said.

The Saudi-led coalition in Yemen, which has been fighting the Houthis since 2015, said it had begun implementing protective measures for vessels transiting the Bab el-Mandeb and pledged to respond firmly to any threats against commercial shipping. The Houthis previously carried out sustained attacks on Red Sea tankers during the Gaza war, which forced many major shippers to reroute around the Cape of Good Hope.

The Bab el-Mandeb currently allows Saudi Arabia to export millions of barrels of oil per day, most of which are bound for Asian refiners in China, India, Japan and South Korea. Analysts warned that any serious disruption would leave Asia with fewer alternatives for Middle Eastern crude, threatening Saudi shipments and increasing the risk of oil prices rising above US$100 a barrel again.

U.S.-Iran war context and Pentagon strain

The blockade threat comes against the backdrop of a wider regional escalation. The White House is seeking nearly $90 billion in additional funding, most of it for military operations in Iran, while Defense Secretary Pete Hegseth is set to testify before the Senate Appropriations Committee. A Pentagon spokesperson said this week that a hundred servicemembers have been injured in the last two weeks.

Iran's foreign minister said earlier that ending the war is possible "through total military victory or through negotiations," framing Tehran's stance as a binary choice between a battlefield outcome and a diplomatic deal. Officials in Washington have not publicly responded to the foreign minister's framing, but the White House funding request signals that the administration is preparing for a prolonged campaign.

NPR's Emily Feng reported on the Houthi blockade threat to the Up First podcast, and a U.S. military official not authorized to speak publicly told NPR that the Defense Department has been slow to share information about casualties. The Pentagon has not updated the press since May, and three former military officials told NPR's Quil Lawrence that the Pentagon's inadequate communication has tarnished trust and credibility among the American public, Congress and crucial regional allies facing Iranian attacks.

Long-term pipeline alternatives face long timelines

Beyond the immediate military and diplomatic dimensions, the blockade threat is sharpening the focus on long-term alternatives to maritime shipping. Saudi Arabia and other Middle Eastern countries are actively pursuing overland pipeline projects to transport oil and reduce reliance on sea routes, but analysts note that construction of such pipelines could take years and would not offset a sudden Bab el-Mandeb shutdown.

The combined effect of the U.S.-Iran standoff and the Houthi threat has put policymakers and energy traders on alert. For Asian buyers already nervous about Hormuz, the possibility of a second major chokepoint shutting down could accelerate the search for alternative supply sources — a process that, given the lead times for pipelines and new production, will not ease the immediate price risk.