Houthis Seize Bab al-Mandab Strait, Threatening Global Trade and Israel

Houthi rebels in Yemen have achieved a significant victory by taking control of the Bab al-Mandab strait, the southern gateway to the Red Sea. This development raises questions about the rebels' motivations, the strait's importance, and potential impacts on Israel. The Houthi takeover is linked to the ongoing civil war in Yemen and Iran's strategy to counter U.S. sanctions by disrupting global supply chains and influencing oil prices. Saudi Arabia's oil production has already seen a dramatic drop of 1.9 million barrels per day, according to OPEC data, a 23% decrease that significantly impacts the cartel.

The Bab al-Mandab strait, while less critical than the Strait of Hormuz, still handles approximately 10% of global oil trade and 8% of liquefied natural gas (LNG) shipments. Combined with Hormuz, Iran now effectively controls passages for about 35% of the world's oil and 28% of its LNG. This control poses a significant threat to international trade, including Israel's, as roughly 33% of its non-diamond imports, excluding diamonds, come from Asia via maritime routes.

Disruptions at Bab al-Mandab necessitate rerouting ships around the Cape of Good Hope, adding at least two weeks to transit times between the Far East and Europe. This extended journey incurs substantial additional costs for fuel, wages, and insurance, as experienced during previous Red Sea blockades. The impact on energy prices is immediate, with Brent crude nearing $110 per barrel, and has downstream effects on consumers, exemplified by record diesel prices in the U.S.

Analysts suggest Iran and its proxies are exploiting a perceived U.S. reluctance to escalate tensions before the November midterm elections. Reports indicate Saudi Crown Prince Mohammed bin Salman sought U.S. assistance but received no response. Intervention from President Trump appears unlikely unless he perceives a significant impact on American consumers before the elections.