Houthi threat to Red Sea shipping raises fresh concerns for oil markets

ISLAMABAD: Yemen’s Houthi movement said on Monday it would ban ships linked to Israel from the Red Sea after Israel renewed military attacks on Iran, raising new worries over shipping routes and energy supplies.

The risk matters more for global energy markets because Iran’s closure of the Strait of Hormuz since Israel and the United States attacked it on February 28 has already disrupted most oil and other energy exports from the Gulf. That disruption has pushed prices higher and triggered a major energy shock.

Saudi Arabia has responded by rerouting more than 70 per cent of its usual daily crude exports to the Red Sea port of Yanbu. The move has helped support the energy market and has limited further increases in global oil prices.

Any prolonged Houthi disruption in the Red Sea, including possible attacks on vessels or port facilities, could therefore create a significant problem for oil flows. When the Houthis began attacking Red Sea shipping in November 2023, Gulf oil exports were still moving freely.