The Red Sea Could Become a New Battleground: Another "Oil Lifeline" at Risk?

（Source: Shipping Online）

After the Strait of Hormuz—an absolutely crucial global chokepoint for oil transport through Iran—was put under blockade, Saudi Arabia diverted much of its crude oil to Red Sea ports for shipment, including Yanbu, easing to a certain extent the global crude supply disruption crisis caused by the U.S.-Iran conflict.

But last weekend, Iranian-backed Houthi forces officially joined the fight, further escalating the conflict in the Middle East, and this crude supply “lifeline” also faces the risk of being cut off.

Based on media reports such as CCTV News, on Saturday the Yemeni Houthi forces said they had launched missiles at Israel. This marks the organization’s first direct involvement in this conflict.

With the Houthis entering the fray, the risk for the Mandeb Strait—a key route in the Red Sea—has clearly warmed up.

According to a report recently cited by the media, European officials said that Iran is urging the Yemeni Houthis to prepare for another attack on Red Sea shipping, but it still depends on whether the United States will further escalate its war against Iran.

It is reported that after the Yemeni Houthis’ leadership launched ballistic missiles at Israel, they are considering whether to take more offensive actions. However, there are disagreements within the Houthi leadership over what level of strategy to adopt.

A source also said that the longer the U.S. and Israel’s war against Iran lasts, the more likely the Houthis are to shift their targets to the Red Sea region. In addition, the U.S. attempt to seize Iran’s oil export hub, Khark Island, could also prompt the Houthis to expand their scale of attacks.

Earlier, a member of the Houthis’ political bureau had said that in order to support Iran, the Houthis might blockade the Mandeb Strait and attack ships belonging to countries that take part in attacks on Iran, Iraq, Lebanon, and Palestine.

At the end of 2023, the Yemeni Houthis had attacked merchant ships transiting the Mandeb Strait in retaliation for Israel’s military actions in Gaza. The attack incidents forced shipping companies to take longer routes, increasing voyages by several weeks, and driving fuel, insurance, and crew compensation costs sharply higher.

The Mandeb Strait is the strait connecting the Red Sea and the Gulf of Aden. It is the “chokepoint” connecting the Atlantic Ocean, the Mediterranean Sea, and the Indian Ocean, and is known as the “water corridor” linking Europe, Asia, and Africa.

How would it affect oil prices?

Richard Bronze, co-founder and head of geopolitical affairs at the consultancy Energy Aspects, said that any development that jeopardizes Saudi Arabia’s crude exports via the Red Sea would push international oil prices even higher.

Data from the shipping data company Vortexa show that in the past two weeks, Yanbu Port has loaded up to 4.6 million barrels of crude oil per day—more than three times the average level for 2025.

Compared with the 15 million barrels per day of oil supply that “disappeared” globally after the closure of the Strait of Hormuz, this figure is only a drop in the bucket. But in an extremely sensitive global oil market, these 4.6 million barrels are enough to disrupt supply. Once this key trading route is cut off again, oil prices will rise further and lead to—or worsen—regional fuel shortages.

Vortexa data show that in the 28 days before March, the volume of crude transported via the Mandeb Strait rose sharply by 21% month-on-month versus February. And these cargo vessels are now becoming potential targets for the Houthis’ new round of attacks.

Since the outbreak of the Iran war on February 28, the global oil benchmark Brent crude price has surged by about 50%, and the trading price on Monday was around $110 per barrel.

Artem Abramov, head of oil and gas research at the consulting firm Rystad Energy, said that if the Mandeb Strait becomes too risky for tankers to cross, Brent crude prices are “very likely” to break through $150 per barrel in the coming months—earlier than current market expectations.

He said on Monday that once the waterway is closed, “it will break through the entire supply system faster.” “Even just the threat that the Red Sea could be closed may keep raising insurance premiums and freight costs over the next few days, and ultimately push most oil price benchmarks higher.”

Another blow to Asia

The Houthis have a variety of weapons, including drones and anti-ship missiles, posing a major threat to ships transiting the Mandeb Strait.

To avoid this waterway, oil tankers departing from Yanbu (the vast majority bound for Asia) would have to take a longer, more winding route: sailing north through the Red Sea’s northern end’s Suez Canal, heading west across the Mediterranean Sea, then going south along Africa’s west coast, and finally crossing the Indian Ocean to reach Asia.

Energy Aspects’ Bronze said: “If the Houthis begin threatening vessels, it will at least add weeks to voyages to Asia. This will intensify the tightness in Asia’s crude oil supply situation.”

Asia is bearing the main pressure from this round of global oil supply disruptions. Roughly 60% of the region’s oil relies on imports from the Middle East, and governments across Asia have taken energy-saving measures during the crisis. For example, the Philippines has announced entering an energy emergency status, with some government departments switching to a four-day workweek; South Korea has suggested that people shorten shower times.

Muyu Xu, senior oil analytics analyst at trade data and analytics firm Kpler, said that so far this month, all crude oil shipments departing from Yanbu and passing through the Mandeb Strait have been headed to Asia.

She said that if Houthi attacks lead to the strait being effectively shut down, Saudi Arabia would either prioritize supplying crude to nearby Europe, thereby reducing exports to Asia; or ship crude to Asia via the Suez Canal.

She also said that many parts of Asia will run out of existing inventories in April and begin experiencing crude oil shortages. “If they can’t get Saudi crude oil in time, it will only make the near-term supply tightness even worse.”

She noted that while high oil prices are an issue, the most important point is that these countries simply cannot obtain enough oil.

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