Houthi threat risks global disruption even without strait shutdown, expert tells 'Post' - interview

While the Houthis lack the capacity to completely shut down the Bab al-Mandab Strait, they can still inflict "meaningful and foundational disruptions" that bolster Iran's pressure campaign, according to Aarathi Krishnan, CEO of RAKSHA Intelligence Futures. Krishnan noted that three vessels had already diverted from the southern Red Sea to avoid the strait, indicating a growing reluctance among ships to risk damage.

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When you apply enough pressure on choke points in this way, you don’t even have to physically shut them down. It’s the threat of it that will make you want to turn around or make insurance premiums so prohibitive that you won’t go through [with it]. And that’s what’s already happening.

This heightened risk is expected to drive insurance premiums "exponentially" higher. Krishnan explained that such pressure on critical choke points doesn't require physical closure; the threat alone is sufficient to deter passage or make it prohibitively expensive. This is already impacting global markets, evidenced by Brent Crude Oil trading at a near six-week high of $94.34 per barrel, up 3.66%, as four more tankers changed course in the Red Sea on Wednesday.

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Iran would continue to support them, potentially providing them with financial support because it allows Iran to pressure the Houthis.

Krishnan highlighted that despite the Houthis being significantly weakened in recent years, they have gradually rebuilt their capabilities, largely with Iranian support. This alliance provides the Houthis with leverage, particularly amid escalating tensions between Washington and Tehran. Iran continues to support the Houthis financially, enabling Iran to exert pressure through its proxy.

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So that allyship, that partnership, gives the Houthis some level of protection.

However, Krishnan also pointed out that Iran is losing allies as regional conflict escalates, which directly increases risk for the Houthis. She suggested the Houthis' timing in threatening the strait and Saudi airspace was strategic, waiting to assess whether the conflict would be short-lived or evolve into the regional escalation they desired. Iran's declaration of the current situation as a "full-blown war with the US" provided the Houthis the opportunity to act on their long-standing intentions.

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Iran declaring earlier this week that it is treating this as a full-blown war with the US is giving, I suppose, the Houthis the opportunity to do the things that they have always wanted to do.