Why Houthis threatening Red Sea shipping could mean more for the oil market this time

Yemen’s Houthis said on Monday that they would ban ships linked to Israel from the Red Sea after Israel renewed its military attacks on Iran, adding to concerns about global shipping and energy flows. This is why it matters and what it means for the Iran war and the global energy crisis: How big is the risk to global energy markets? Iran’s closure of the Strait of Hormuz since Israel and the United States attacked it on February 28 has disrupted most oil and other energy exports from the Gulf, raising prices and causing a major energy shock. Saudi Arabia has responded by diverting more than 70 per cent of its normal daily crude exports to the Red Sea port of Yanbu. That has been a lifeline for the energy market, helping to keep down global oil prices. Any sustained Houthi disruption to Red Sea shipping, including potential attacks on shipping or ports, could be a big problem. When the Houthis launched attacks on Red Sea shipping in November 2023, Gulf oil exports were flowing freely, meaning cargoes were diverted to avoid the Red Sea, but not halted. This time, they are being loaded there. A Houthi source told Reuters that preventing Israeli ships from transiting the Red Sea was “a first step” but that if escalation continued, the group would stop any ships heading to Israel as well as other measures. When the group attacked shipping during the Gaza war, its stated target of Israel-linked vessels included any vessel belonging to any company that used Israeli ports and its attacks on those ships dissuaded most companies from using the route. Who are the Houthis? The Houthis emerged as a military, political and religious movement in north Yemen in the 1990s, fighting guerrilla wars against the government in Sanaa. After the 2011 Arab Spring, they strengthened ties with Iran and seized on instability to capture the capital in 2014, derailing a Gulf-backed political transition plan. As Yemen’s civil war ground to a stalemate, the Houthis attacked oil installations and o