Oil prices rose 10% after Houthis seized territory along the Bab el-Mandeb Strait

The growth of oil prices accelerated amid restrictions on the passage of ships through the Strait of Hormuz, where US and Iranian strikes resumed, and the successful attack by the Yemeni Houthis on government troops and the capture of all territory along the Bab el-Mandeb Strait, which will allow pro-Iranian groups to block the movement of oil and gas along this route as well.

 

November Brent crude futures rose by 10% in two days to $108/barrel (+12.5% per week, +25% per month).

 

Over the past two days, Yemeni Houthis have seized the port city of Moka and advanced along the Red Sea coast to the strategically important Hanish Islands. After closing the Strait of Hormuz, Saudi Arabia reoriented most of its oil exports to the Red Sea route, but over the past two months, escalating tensions with the Houthis have disrupted that route. Saudi oil exports fell to a nine-year low of 3 million barrels per day in August, according to Bloomberg, Kpler and Vortexa.

 

If the Houthis gain control of this waterway, it would give Iran an important advantage in a war with the United States, as it would reduce energy supplies to the global market and continue to put pressure on oil prices.

 

It will also make it more difficult for Trump to find a way out of the war with Iran, which has already negatively affected the electoral prospects of his Republican Party ahead of the midterm elections in November.

 

At the same time, the Houthi-controlled Humanitarian Operations Coordination Center in Yemen said that shipping in the Red Sea is safe for all companies, except for vessels from Saudi Arabia, Reuters reported.

 

According to sources, forces of the internationally recognized Yemeni government and their allies are retreating south along the Red Sea coast to the Dhubab area near Bab el-Mandeb, located opposite Perim Island. Control of Dhubab and the island itself will be crucial for control of the strait.