Iran-backed Houthis Seize Key Red Sea Island

Iran-backed rebels in Yemen just got a tighter chokehold on the world’s oil supply. The Houthis captured Perim Island in the Bab el-Mandeb Strait, several outlets reported yesterday. The narrow corridor, which connects the Red Sea to the ocean, is a vital conduit for Saudi Arabian oil shipments and has taken on even greater importance as Iran restricts traffic in the Strait of Hormuz.

The Houthis also advanced on Yemen’s Red Sea coast this week in a ground offensive that has killed 500 people and displaced 46,000 locals, per the UN.

Oil whack-a-mole

Gaining further control of the 20-mile-wide strait makes it easier for the Houthis to stymie Saudi oil exports—which were already down by a third in August from July amid Houthi attacks:

• Saudi oil suppliers sent some tankers through the Red Sea’s Northern exit, aka the Suez Canal, but that route is longer and costlier.
• Saudi oil is increasingly in danger even before it reaches a boat: Yesterday, the Kingdom said it shut down a pipeline that carries oil to the Red Sea as a “precautionary measure” following drone strikes from Iraq the previous day.

Meanwhile, oil prices have passed the $100-per-barrel mark for the first time since May, and were up nearly 8% this week amid escalating fighting between the US and Iran. The Houthis’ capture of Perim could push prices even higher.

Big picture: Experts say that oil disruptions give Iran more leverage in negotiations with the US.—SK

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