Brent crude surges sharply! Houthi forces seize the Red Sea coastal city of Mocha—control over the Bab el-Mandeb Strait is now in flux.

Bab el-Mandeb Strait: The 'Gate of Tears' Chokepoint In Arabic, Bab el-Mandeb means 'Gate of Tears'—a reference to the perilous nature of passage through this waterway. Located at the southern end of the Red Sea, the strait connects the Red Sea with the Gulf of Aden and serves as the Red Sea’s sole outlet to the Indian Ocean. At its narrowest point, it spans just 29 kilometers, squeezed between Yemen and the Horn of Africa; vessels navigating it have no choice but to traverse two narrow shipping lanes. What does 29 kilometers mean in practical terms? It falls well within the effective range of shore-based anti-ship missiles and large-caliber artillery. Whoever controls the high ground on both sides of the strait effectively holds the switch for this maritime corridor. Under normal conditions, roughly 10–12% of global seaborne oil transits this strait—some 4 to 7 million barrels per day—and about one-quarter of global containerized trade also passes through. Some 70% of Europe’s crude oil imports from the Middle East rely on this route. According to Kpler shipping data, oil transit volumes through the Bab el-Mandeb Strait have already declined by approximately half relative to normal levels due to Houthi attacks. Should security deteriorate further following the fall of Mocha, even the remaining half may be at risk. Figure 3: Oil storage tanks at a Saudi Aramco refining facility (Photo: Simon Dawson / Bloomberg, Source: Forbes) The most lethal blow: The backup route is also being choked off This is the most alarming implication of Mocha’s capture. Following the escalation of U.S.–Iran tensions at the end of February, the Strait of Hormuz effectively ground to a halt—this strait handles around 20% of global oil shipments, or roughly 20 million barrels per day. Gulf oil producers—including Saudi Arabia—were forced to activate contingency plans. Saudi Arabia’s contingency plan is the East–West Crude Oil Pipeline (Petroline), built during the Iran–Iraq War in the 1980s. Stretching over 1,200 kilometers across the Arabian Peninsula—from the oil-rich Persian Gulf region in the east to the Red Sea port of Yanbu in the west—the pipeline was originally designed to bypass the Strait of Hormuz should it become threatened. After the outbreak of hostilities, Saudi Arabia rapidly expanded Petroline’s capacity. In March, crude exports via the Red Sea reached approximately 4.07 million barrels per day. Current pipeline capacity has surged dramatically from a pre-conflict level of roughly 2 million barrels per day, with expansion expected to raise maximum throughput to 7 million barrels per day. Yanbu Port’s expansion has enabled Saudi oil exports to recover to about 60% of pre-war levels. Herein lies the problem: Crude loaded at Yanbu must sail southward through the Bab el-Mandeb Strait to reach Europe or Asia. With Hormuz closed, Saudi Arabia relied on the Red Sea lifeline—but now the Bab el-Mandeb Strait itself is under mounting pressure from Houthi forces. Both the primary and the backup routes are simultaneously strained. In July, the Houthis announced a maritime blockade against Saudi Arabia and launched repeated strikes on Saudi-linked tankers. Some Saudi tankers were forced to reroute around Africa’s Cape of Good Hope—extending voyage time from Yanbu to Asia from 19 days to 48 days, increasing fuel costs per vessel from $1.26 million to $2.87 million. Factoring in additional expenses, total per-vessel transportation costs rose by over $2.5 million. With Mocha now under Houthi control, their coercive capability over the Bab el-Mandeb Strait has intensified further. The alternative export corridor Saudi Arabia painstakingly built over six months is rapidly transforming into another high-risk shipping lane. Oil prices: From $82 to $102 in just six weeks Market pricing has outpaced battlefield developments.

After Saudi pipelines were attacked, Gulf exports expanded: seven super-tankers loaded 14 million barrels—Brent crude broke $100 while WTI plunged over 6%.

On September 13, drone attacks forced Saudi Arabia to shut down its East–West Crude Oil Pipeline, halting all crude loading operations at the Red Sea port of Yanbu. Yet, within less than a week, Saudi Aramco completed a massive rerouting of its export logistics—a speed that exceeded expectations among some market participants. According to Reuters’ citation of Vortexa data, since September 12, Saudi Arabia’s average daily crude loading volume via the Gulf has risen to approximately 3.7 million barrels per day—up from about 2.9 million barrels per day earlier this month. Meanwhile, average daily loading volume via the Red Sea stood at roughly 3.9 million barrels per day between September 1 and 11. In a report released last Friday, JPMorgan analysts noted satellite data showing that Saudi Arabia’s average daily crude flow through the Strait of Hormuz over the past six days had climbed to 2.9 million barrels—up sharply from just 700,000 barrels per day in August. A single-day loading volume of approximately 14 million barrels last Sunday further confirmed Saudi Arabia’s rapid pivot of export focus toward Gulf ports—and suggested that the duration of this supply disruption may prove shorter than the market’s previously most pessimistic forecasts. Oil price retreat: Geopolitical premium recedes amid diplomatic optimism Brent crude briefly fell below $100 per barrel, driven by two converging forces: improved supply outlooks stemming from partial restoration of Saudi exports, and a geopolitical risk premium unwind triggered by renewed diplomatic openings between the U.S. and Iran. Bob Yawger, Head of Energy Futures at Mizuho, remarked: 'Just days ago, the prospect of U.S.–Iran talks seemed extremely remote—this is a step in the right direction.' According to Al Jazeera, Iran has conveyed its conditions for resuming negotiations through mediators, a position confirmed by Iranian security chief Mohsen Rezaei. Notably, actual hostilities in the Middle East have not ceased. The Yemeni Houthis claim to have launched attacks on Saudi Aramco facilities in Riyadh and the Red Sea city of Yanbu, and continue advancing military operations along the Red Sea coast. Reports on Thursday, September 17, citing Iranian sources, indicated that, following Saudi appeals, a major power has requested Iran’s assistance in restraining Houthi activities. While geopolitical uncertainty remains, the market’s current pricing focus has shifted from risk premiums toward supply recovery expectations. Sales strategy pivots eastward: Asian refiners benefit, European supplies tighten Following the pipeline shutdown, Saudi Aramco adjusted its sales strategy markedly: canceling some crude cargo deliveries to European customers while increasing sales destined for Asian markets—loaded at eastern ports along the Strait of Hormuz. As reported last week by media citing trade sources, Saudi Arabia will sell approximately 60 million barrels of crude from Ras Tanura port this month and next, with delivery completed via ship-to-ship transfers at Sohar Port in Oman. This arrangement implies more ample Saudi crude supply for Asian refiners, while European buyers face a temporary tightening of supply—forcing them either to seek alternative sources or absorb spot-market premium pressures. For Asian refiners, the arrival of increased Saudi supply coincides with falling oil prices, easing procurement cost pressures. However, ship-to-ship transfer delivery methods introduce greater logistical complexity and some uncertainty regarding port arrival timing.

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