International oil prices are facing a four-pronged assault!

This time, the Houthis did not adopt a rigid, all-or-nothing 'fight-to-the-death' strategy. Instead, they first launched a surprise attack on the Bab el-Mandeb Strait and seized the port of Mocha—drawing the attention of Yemen’s government forces—then conducted a feint assault against Taiz’s frontline defenses. Finally, they circumvented those defenses via rapid maneuver warfare, covering over 100 kilometers in just 36 hours to capture Turba, the vital southern supply hub for Taiz. By cutting off food, water, and logistical supplies to the defending forces, the Houthis now stand a real chance of forcing Taiz’s surrender. According to foreign media reports, several major tribes along the southern border of Taiz and Lahj provinces have already reached agreements with the Houthis: if they lay down their arms, their property will not be confiscated, and past grievances will be forgiven. For Saudi Arabia, this is extremely bad news. Losing Taiz would leave government forces along the Bab el-Mandeb Strait vulnerable to Houthi attacks from elevated terrain—and encircled from two sides. Losing Taiz could also sever the overland road linking to Aden—the internationally recognized temporary capital of Yemen. Aden, a coastal metropolis of one million people, suffers severe freshwater shortages and cannot afford desalinated seawater. Its drinking water comes exclusively from wells in northern valleys, delivered via pipelines; its power plants rely on fuel transported by road. This means Aden may soon face total collapse—starvation, water cutoff, blackouts, and fuel shortages. Some might ask: Why not use maritime transport instead? The Houthis possess drones and missiles capable of holding their own against the U.S. Navy—blockading Aden’s seaport would be effortless. Yemen’s government forces are, after all, a fragile coalition of disparate factions—can they possibly win such an uphill battle? Thus, Saudi Arabia urgently launched a so-called "comprehensive large-scale counteroffensive," claiming to have mobilized over 100,000 ground troops! One prong aims to recapture the Bab el-Mandeb Strait and break Iran’s dual-strait blockade. The other targets Turba and the nearby Habash Mountains to relieve besieged Taiz. The Saudi-led coalition’s air force has gone all-out—conducting more than 150 bombing raids against Houthi positions in a single day! Yemeni government forces claim to have killed 1,860 Houthi fighters and carried out 2,103 "precision strikes." Yet the U.S.-based Institute for the Study of War stated it has observed no major battlefield victories by government forces. Mocha—the strategic port on the Bab el-Mandeb Strait—remains firmly under Houthi control. Taiz remains encircled and is being gradually "digested" by the Houthis. If the Houthis achieve a decisive victory, will Saudi Arabia deploy its own ground troops? Gulf of Mexico: Hurricane hits—U.S. must cut production! Just as Trump imposed a diesel export ban to pressure the G7 into releasing 100 million barrels of strategic reserves—precisely when oil prices were being suppressed—a hurricane named "Isaias" approached the Gulf of Mexico, forcing oil companies operating there to slash output and evacuate personnel. At noon on October 8, data from the U.S. Bureau of Ocean Energy Management showed that nearly two-thirds of oil production and 57% of natural gas production in the Gulf of Mexico had been shut down. Moreover, 14% of U.S. refining capacity lies directly in the storm’s projected path! "This timing couldn’t be worse—gasoline and diesel inventories are already critically low," said Andrew Lipow, president of Lipow Oil Associates, adding that "even brief disruptions could have severe consequences." U.S. media speculate that it was precisely this hurricane threat—and already-low inventories—that prompted Trump to declare he would not launch military action against Iran before the midterm elections. And if the hurricane intensifies further, even graver impacts may follow! Global oil reserve buffers are nearly exhausted! On October 9, the CEO of Saudi Aramco—the world’s largest integrated petroleum and petrochemical company—stated that global commercial oil inventories now stand at less than 6 billion barrels, most of which are effectively inaccessible. "The entire system is severely strained."

A more serious crisis is looming for the international oil market—and its duration will exceed expectations.

The world’s oil supplies are nearing exhaustion. Just three months ago, such a scenario seemed implausible—but with the Strait of Hormuz nearly fully blockaded, acute global crude shortages are increasingly becoming a tangible reality. Analysts no longer anticipate a swift conclusion to any potential war among the U.S., Israel, and Iran. Instead, they now contemplate prolonged, severe disruptions to energy flows—and the outlook appears deeply grim. Kpler reported earlier this month that, as of May 8, cumulative Middle Eastern oil supply losses since February 28 had reached 782 million barrels—and are expected to swell to 1 billion barrels by month-end. Daily production figures are equally alarming: Saudi Arabia is losing over 3 million barrels per day (bpd); Iraq, 2.88 million bpd; Iran, 1.69 million bpd; and Kuwait, 1.75 million bpd. Given such massive output declines, drawing down strategic reserves is the most rational response. The International Energy Agency (IEA) had previously forecast global oil inventories would hit record highs—a key reason behind predictions of severe oversupply, estimated at nearly 4 million bpd. But that projection predates the outbreak of hostilities. Now, the IEA warns that global oil demand will outstrip supply this year. In its latest monthly report, the IEA estimates global oil supply will decline by approximately 3.9 million bpd this year—a figure far below the actual current shortfall across the Middle East. The IEA itself estimates the regional supply gap stands at 10.5 million bpd. Yet despite this 3.9-million-bpd reduction in supply—perhaps an optimistic estimate—global demand is projected to fall by only 420,000 bpd. "Consumption can only shrink so much. Once inventories are depleted, they’re truly gone," Ellen Wald, Senior Fellow at the Atlantic Council’s Global Energy Center, told the Wall Street Journal this week. "At a certain point, markets will erupt—and prices will skyrocket." This echoes a warning issued earlier this month by Amin Nasser, CEO of Saudi Aramco, who noted that global onshore fuel inventories are depleting at a record pace. As reported by the Financial Times, Nasser described these stocks as "the only buffer currently available," but added they have "declined substantially." According to the Financial Times, JPMorgan’s commodity analysts have likewise sounded the alarm, warning that commercial oil inventories in developed nations may soon "approach operational criticality" next month—meaning supply shortages will become even harder to manage than they are today. JPMorgan’s Natasha Kaneva stated: "Our conclusion is that the straits will reopen in June—no matter what." She emphasized that ending the war is the sole pathway for the world to avert shortages. Should that fail to happen, "the next phase of this shock may not resemble a traditional crude price spike—but rather a refining and end-user fuel crisis." The bank’s Global Head of Commodities Strategy noted that only "a clear, credible declaration jointly endorsed and confirmed by both sides" could calm markets.

Saudi Aramco CEO Says Global Commercial Oil Stocks 'Barely a Cushion'

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Saudi Aramco's CEO warns global commercial oil stocks offer minimal buffer, with refilling potentially taking two years. Potential disruptions in the Strait of Hormuz also threaten overall energy security.

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