The oil market is facing the prospect of a second major choke point at a time when the first one, the Strait of Hormuz, is already severely disrupted. Iran-backed Houthi forces have seized Yemen's Red Sea port town of Mocha and moved onto Perim Island at the mouth of the Bab el-Mandeb Strait, as per a CNN report, putting them in a position to threaten a route that has become far more important to Saudi Arabia since Hormuz was effectively closed to most traffic. Brent crude briefly climbed above $107 a barrel this week and was still headed for an 8% weekly gain on Friday, while US diesel prices crossed $6 a gallon for the first time.
The immediate threat is not that the Houthis suddenly stop every ship passing through Bab el-Mandeb. The bigger danger is that they make the route too risky for commercial operators at precisely the moment when Gulf producers need it most. That would leave an already strained global oil system with fewer ways to move crude from the Middle East to Europe and beyond.
