For Saudi Arabia, the Houthi attacks compound an already precarious export situation. With the Strait of Hormuz effectively closed since late February, the kingdom had relied on the East-West Pipeline to move crude to Red Sea terminals, but the Bab el-Mandeb route is now under direct threat. Even if vessels can physically sail, fully loaded VLCCs cannot transit the Suez Canal and must use the SUMED pipeline or detour around Africa, adding weeks to voyage times and raising costs.
The Houthi escalation appears driven by Iran’s Revolutionary Guard, which seeks to use the Bab el-Mandeb as an additional pressure point against the US and its allies, according to Baraa Al Shaiban, a Yemen expert at the Royal United Services Institute. The group has linked its operations to the “siege-for-siege” equation, vowing to continue until the Saudi-led blockade on Yemen is lifted.
What to Watch
The immediate question is whether the Houthi attacks on land-based energy infrastructure and the Red Sea shipping lane will force a sustained repricing of global crude, or if diplomatic overtures and still-flowing tanker traffic will cap the risk premium. With both the Strait of Hormuz and Bab el-Mandeb under duress, and US-Iran talks hanging in the balance, can Saudi Arabia keep its remaining export artery open without triggering a direct military confrontation that engulfs the entire region?
Sources: Source 1 · Source 2 · Source 3 · Source 4 · Source 5 · Source 6
