Houthi forces have seized Yemen's Red Sea coast and Perim Island, giving them a hold over the Bab el-Mandeb Strait just as the Strait of Hormuz remains severely disrupted and Saudi Arabia's East-West pipeline has come under attack. The overlapping disruptions show that rerouting around one chokepoint simply exposes the next, and the IEA now calls the current episode the largest oil-supply disruption in market history, bigger than 1973. WTI crude was trading around $100.8 a barrel as the disruptions continued to ripple through markets.
The Houthis now occupy positions overlooking Bab el-Mandeb from the Yemeni coast and Perim Island, one of the world's most important shipping routes. That would be significant on its own, but the Strait of Hormuz on the other side of the Arabian Peninsula is already severely disrupted, which pushed Saudi Arabia to rely more heavily on its East-West pipeline to move crude to Red Sea export terminals. That pipeline was then attacked as well.
Chokepoints keep shifting, not disappearing
In 2024, roughly 20 million barrels of oil per day passed through Hormuz, about one-fifth of global petroleum consumption, while Bab el-Mandeb carried around 8.7 million barrels per day in 2023. Rerouting tankers around either chokepoint adds weeks of sailing and raises insurance and freight costs. Each workaround reduces one risk while creating another piece of infrastructure that must be defended.
A pattern with a long history
The 1973 Arab oil embargo more than tripled prices. Attacks on Saudi Arabia's Abqaiq facilities in 2019 temporarily removed around 5% of global oil supply. This year's escalation has produced what the IEA describes as the largest oil-supply disruption in market history, exceeding even 1973. Strategic reserves and alternative routes provide redundancy, but they do not remove the underlying dependency, since reserves are depleted once used and rerouted cargoes must still come from somewhere else.
Electrification as a long-term hedge
The European Commission has estimated that faster clean-energy deployment could cut the EU's fossil-fuel import bill by €130 billion annually by 2030. That shift carries its own risk: According to the IEA, China is expected to supply more than 60% of refined lithium and cobalt by 2035, and around 80% of battery-grade graphite and rare earth elements. The dependency on fuel passing through unstable chokepoints does not disappear until the number of daily deliveries it requires does.
Source: Oilprice.com
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