Houthi Blockade Threatens Saudi Shipping, Potentially Impacting 25% of Global Oil Supply

A potential maritime blockade by Yemen's Houthi rebels against Saudi Arabia raises concerns about significant disruptions to global oil supplies. Analysis suggests that up to 25% of the world's oil could be affected if the Bab el-Mandeb Strait, a crucial waterway connecting the Red Sea and the Arabian Sea, becomes non-operational.

Shipping analysis firm Kpler highlighted the potential impact, noting that traffic through the Bab el-Mandeb Strait has already decreased significantly. Currently, an average of 45 vessels transit the strait daily, down from 65-72 before October 2023. A full blockade targeting Saudi vessels could halve this traffic, with further escalation posing even greater risks.

Evidence of the looming threat is already apparent, as two oil tankers carrying Saudi crude and other vessels have altered their routes since the blockade was declared. Saudi Arabia has been using its East-West pipeline to transport oil to the Red Sea port of Yanbu for export to Asia, a route that could be jeopardized.

Adding to global energy market anxieties, Ukraine's attacks on Russian Black Sea ports have also affected the Caspian Pipeline Consortium, which handles about 2% of global oil supply. The combined pressures could lead to a significant increase in international oil prices.