The Houthi blockade on Saudi shipments through the Bab al-Mandeb threatens to severely disrupt the largest Middle East Hormuz-bypass route. Saudi Arabia has been exporting around 5mn b/d of crude oil and refined products from the Red Sea since the start of the Middle East conflict, most of which goes through the narrow chokepoint. With Iranian attacks also causing covert shipments through the Strait of Hormuz to fall sharply this week, oil markets are under renewed pressure and Brent prices have shot back up past $100/B, as the pincer movement unnerves oil markets.
As market concerns mounted this week, IEA Executive Director Fatih Birol issued a statement on 21 July warning that “the escalation in hostilities affecting the Strait of Hormuz and energy infrastructure in the region increases security of supply concerns and uncertainty over the market outlook. Threats to the Bab al-Mandeb Strait, which has become increasingly important as a route to bypass the Strait of Hormuz, exacerbate these concerns further.” (CONTINUED - 879 WORDS)
