How Houthis backing Iran could trigger a double chokepoint crisis

The global oil market is once again confronting the possibility of a strategic shock. Recent signals from West Asia suggest that the risk is no longer theoretical. Senior Houthi official Mohammed al-Bukhaiti has confirmed that Yemen is aligning militarily with Iran and preparing to declare what he called “Hour Zero”.

Such language should not be dismissed as rhetorical escalation. The geography of energy markets means that a coordinated disruption of maritime chokepoints could trigger one of the most severe oil supply shocks in modern history.

The scenario now being discussed in security circles sounds alarming and a cause for definite concern. If the Strait of Hormuz and the Bab-el-Mandeb Strait are disrupted at the same time, the global oil transport system will face simultaneous paralysis at both ends of the Arabian Peninsula.

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Crude oil prices crossing $150 per barrel would not be surprising under such circumstances. In fact, prices approaching $200 per barrel cannot be ruled out. To understand why, one must begin with geography.

The Strait of Hormuz remains the most critical oil transit route in the world. Roughly one fifth of global oil consumption passes through this narrow channel connecting the Persian Gulf to the Arabian Sea. Tankers carrying crude from Saudi Arabia, Iraq, Kuwait, and the United Arab Emirates must pass through it to reach global markets.

But the Hormuz chokepoint is only half the story.

The Bab-el-Mandeb Strait sits at the southern entrance of the Red Sea between Yemen and the Horn of Africa. It links the Red Sea to the Gulf of Aden and ultimately the Indian Ocean. The Bab-el-Mandeb Strait is a critical maritime bottleneck, accounting for approximately 12 per cent of total seaborne traded oil and about 8 per cent of liquefied natural gas trade.

Together, these two passages form the arterial network through which Middle Eastern energy flows toward Europe, Asia, and beyond. A disruption in either chokepoint is disruptive. A disruption in both simultaneously would be catastrophic.

Iran appears increasingly aware of this reality. Over the past decade, Tehran has steadily refined a doctrine of economic warfare. The objective is straightforward. If Iran cannot win through conventional military confrontation, it can impose economic pain on its adversaries by targeting the infrastructure that sustains the global economy.

Energy shipping lanes are the most obvious pressure point.

The attack on the Port of Fujairah illustrates this strategy clearly. The Port of Fujairah, located in the United Arab Emirates just outside the Strait of Hormuz, was designed specifically to bypass that chokepoint. It provides an alternative export route for Gulf oil that does not require tankers to pass through Iranian controlled waters.

The Port of Fujairah, a key strategic hub, has a primary oil export capacity of roughly 1.5 to 1.8 million barrels per day through the Habshan-Fujairah pipeline. When Iran targeted infrastructure linked to Fujairah, the message was unmistakable. Even alternative routes are not safe.

Saudi Arabia has also spent years attempting to reduce its vulnerability to the Strait of Hormuz. The kingdom operates pipelines that move crude from its eastern oil fields to ports on the Red Sea. These routes allow Saudi exports to bypass the Persian Gulf entirely.

But this solution introduces another vulnerability.

Once tankers leave Saudi Red Sea ports, they must pass through the Bab-el-Mandeb Strait to reach the Indian Ocean and the Suez Canal route to Europe. This is where the Houthis enter the picture.

The Houthi movement in Yemen controls territory along the Red Sea coastline. With Iranian support, the group has developed a growing arsenal of anti-ship missiles, drones, and naval mines. Over the past several years they have repeatedly demonstrated the ability to target commercial shipping in the Red Sea.

If Iran seeks to counter Saudi bypass pipelines, activating the Houthis as a maritime deterrent in the Bab-el-Mandeb is the logical step. It allows Tehran to threaten shipping routes indirectly while maintaining plausible deniability. In practical terms this means that even if Gulf oil successfully avoids the Strait of Hormuz, it may still face danger further south.

The Red Sea could become an active combat zone. Shipping companies would immediately reassess risk. Insurance premiums for tankers would surge. Some carriers would refuse to transit the region entirely.

And the dangers do not end with missiles. If the Houthi rebels do not get you in the Red Sea, the Somalian pirates might. The waters around the Horn of Africa have long been vulnerable to piracy. While international patrols reduced attacks over the past decade, instability in maritime routes could quickly revive pirate activity.

For commercial shipping, the combined risk environment becomes intolerable. Tankers may be forced to reroute around the Cape of Good Hope at the southern tip of Africa if transit through the Red Sea becomes too dangerous. That detour adds thousands of nautical miles to voyages between the Middle East and Europe.

Transit times increase dramatically. Shipping costs surge. Effective oil supply shrinks because tankers spend longer periods in transit rather than delivering cargo. Even without a physical blockade, the market would react violently.

Energy markets are forward-looking. Traders price risk before supply actually disappears. A credible threat to both Hormuz and Bab-el-Mandeb would immediately trigger panic buying in oil futures markets.

A large portion of the world’s spare production capacity is also located within the Persian Gulf. If tankers cannot safely leave the region, spare capacity becomes irrelevant. The result is a sudden perception that global oil supply has tightened dramatically.

History offers a useful comparison. The oil shocks of the 1970s were triggered by supply disruptions of only a few million barrels per day. Yet those events reshaped the global economy and triggered years of inflation. A dual chokepoint crisis today could remove far more supply from the market, at least temporarily. The consequences would extend far beyond crude oil.

Energy shipping lanes also carry liquefied petroleum gas, liquefied natural gas, fertilisers, and petrochemicals. Many of these materials are essential inputs for agriculture and manufacturing. If the Red Sea and the Persian Gulf become high-risk zones, shipments of these products will slow or stop.

The world could face disruptions in crude oil, LPG, LNG, fertilisers, and industrial chemicals simultaneously. For emerging economies that rely heavily on imported energy and fertiliser, the economic impact could be severe. Food prices would rise. Transportation costs would surge. Inflationary pressures would intensify across global supply chains.

This is why the price trajectory of oil in such a crisis becomes so unpredictable. At $120 per barrel, demand destruction begins slowly. At $150 per barrel, the psychological impact becomes global. Airlines, shipping companies, and manufacturing industries begin altering operations dramatically.

But if supply disruptions persist and markets perceive a prolonged threat to maritime routes, crude oil can go even to $200 per barrel, which is not outside the realms of possibility.

Right now, that fear is concentrated around two narrow passages of water. The Strait of Hormuz and the Bab-el-Mandeb Strait together form the fragile hinge on which global energy security rests.

If both chokepoints come under sustained threat, the world may discover just how fragile the system truly is. The Iran conflict is becoming more perilous by the day and bodes chaos for emerging economies like India. It is easier to summon the genie from the bottle but very difficult to put it back.

(Smiran Bhandari is an investment manager and equity analyst with a deep interest in geopolitics, financial markets, and global power dynamics. The views expressed in this article are personal and solely those of the author. They do not necessarily reflect the views of Firstpost.)