Houthis Seize Bab el-Mandeb Strait, Threatening Global Trade and Israel
Translated & summarized from Globes by baba
Houthi rebels in Yemen have seized the Bab el-Mandeb strait, a vital chokepoint for global trade and a key route for Israeli imports. The move has driven up oil prices and threatens to disrupt international supply chains, with potential implications for U.S. policy ahead of midterm elections.
The story in 5 lines · by baba
- Houthi rebels have captured the Bab el-Mandeb strait, impacting global trade.
- The strait is crucial for oil and LNG shipments, affecting global energy prices.
- Israel's trade with Asia is at risk due to the Houthi control.
- Alternative shipping routes are significantly longer and more costly.
- U.S. response may depend on election considerations and consumer impact.
The Houthi rebels in Yemen have achieved a significant victory by taking control of the Bab el-Mandeb strait, the southern gateway to the Red Sea. This development raises questions about the motivations behind the Houthi move, the strategic importance of the strait, and its potential impact on Israel.
The Houthi takeover comes amid a renewed civil war in Yemen and ongoing U.S. sanctions on Iran. The rebels have inflicted heavy losses on Saudi Arabia, reducing its oil production by 1.9 million barrels per day, according to OPEC data. Iran, meanwhile, is seeking ways to retaliate against the U.S. through oil prices and disruptions to international supply chains. The benchmark Brent crude oil price has approached $110 per barrel for the first time in two months, a rise directly linked to the Houthi control of Bab el-Mandeb, which allows them to block passage.
While the Strait of Hormuz is more critical to global oil trade, handling about 25% of international oil shipments, Bab el-Mandeb accounts for approximately 10%. For liquefied natural gas (LNG), the figures are around 20% for Hormuz and 8% for Bab el-Mandeb. Combined, Iran now effectively controls the passage for about 35% of global oil and 28% of LNG.
Israel faces potential disruption to its trade, as about 33% of its imports, excluding diamonds, originate from Asia and pass through Bab el-Mandeb. Given that 99% of Israel's trade is maritime, the Houthi control poses a significant threat to its supply chains.
An alternative route for ships avoiding Bab el-Mandeb would involve sailing around the Cape of Good Hope, adding at least two weeks to transit times between the Far East and Europe. This extended journey incurs additional costs for fuel, wages, and insurance, as demonstrated during previous Red Sea disruptions.
The immediate consequence includes the rise in oil prices, but the impact on consumers is also significant, with average diesel prices in the U.S. exceeding $6 per gallon. This sustained high energy cost is a result of ongoing global price dynamics.
Regarding a potential U.S. response, Iran and its proxies appear to be exploiting President Donald Trump's desire to avoid further escalation before the November midterm elections. Reports suggest that Saudi Crown Prince Mohammed bin Salman sought U.S. assistance but received no response. Trump may only intervene if he perceives the Middle East events as having a colossal impact on American consumers before the elections.
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