As Yemen's Houthi rebels joined the war between the United States and Israel and Iran, concerns are growing that the Red Sea, which has served as a detour to the Strait of Hormuz, could be sealed off.
On the 30th (local time), CNN said, "With the Houthi rebels backed by Iran joining the war over the weekend, even oil supplies through the Red Sea are at risk of being cut off," adding, "This will put additional upward pressure on global oil prices."
On the 28th, Houthi Spokesperson Yahya Saree said, "We carried out the first military operation, including missile attacks, targeting Israel's key military objectives," adding, "We will continue the operation until Israel halts attacks on all fronts." This is the first time since the war began that the Houthis have taken military action.
Signals are also emerging that Iran's tactical reach is expanding into the Red Sea. Bloomberg, citing multiple European officials, reported that Iran is pressuring the Houthi rebels to launch attacks in the Red Sea in preparation for a possible escalation following additional U.S. strikes.
Saudi Arabia has expanded oil exports through Yanbu port on the Red Sea after the Strait of Hormuz was closed due to the war. According to shipping data firm Vortexa, up to 4.6 million barrels of crude were loaded per day at Yanbu over the past two weeks, more than triple last year's average.
Although export volumes via the Red Sea are smaller than the 15 million barrels that had been shipped through the Strait of Hormuz, some analysts say that even this volume could deliver a major shock to the global market when oil supply chains are unstable. If access to the Red Sea is also blocked, oil prices would rise further and fuel shortages could worsen.
In fact, at the end of 2023, the Houthi rebels attacked ships passing through the Bab el-Mandeb Strait, the entrance to the Red Sea, in retaliation for Israel's war in the Gaza Strip, stretching voyage times by weeks. As a result, fuel costs, insurance premiums, and crew wages rose, and shipping companies had to choose longer routes.
Artem Abramov, head of oil and gas research at consulting firm Rystad Energy, projected that if even the Bab el-Mandeb Strait becomes excessively risky for tanker traffic, Brent could top $150 per Barrel within the next few months. He said, "A waterway closure will bring down the energy system much faster." According to Vortexa, crude shipments through the Bab el-Mandeb Strait in the first 28 days of this month rose 21% from the previous month.
If the Red Sea is sealed off, Asian countries are expected to take a major hit. Asia relies on the Middle East for 60% of its oil consumption, and if even the Red Sea route becomes risky, it will have to use much longer detours. According to energy advisory firm Kpler, all crude that departed Yanbu and passed through the Bab el-Mandeb Strait this month was headed to Asia. Mu Yu Xu, senior crude analyst at Kpler, said, "If Saudi crude supplies are delayed, the short-term supply shortage will intensify further."
If Houthi attacks intensify, tankers bound for Asia will likely have to pass through the Suez Canal at the northern end of the Red Sea, cross the Mediterranean, and then detour along Africa's west coast into the Indian Ocean. Bronze at consulting firm Energy Aspects projected, "If the Houthi rebels begin threatening ships, sailing times to Asia will increase by at least several weeks," adding, "This will further exacerbate Asia's crude supply shortfall."