The Yemeni Houthis naval blockade against Saudi Arabia has threatened the stability of another vital chokepoint in the Middle East, leaving analysts and traders to speculate on the ramifications to global energy flows in an already volatile market.
Houthi leaders on Monday declared the naval blockade of Bab el-Mandeb, a narrow strait located between the Horn of Africa and the Middle East, several hundred miles west of the Strait of Hormuz. At its narrowest point, the strait is 18 miles wide and responsible for roughly 9% of total seaborne-petroleum and natural gas products, according to the Energy Information Administration. In 2018, an estimated 6.2 million b/d of crude oil, condensate and refined products flowed through the strait, EIA added.
Since the blockade announcement, the Iran-aligned military group attacked two Saudi oil tankers in the Red Sea on Thursday, Yayha Saree, chief spokesman of the Yemen Armed Forces said in a live broadcast Thursday. He added that the armed forces had forced approximately 10 ships in the Red Sea to "retreat and return."
There have been no imports from Iraq for four weeks, and the U.S. last imported crude from Saudi Arabia during the week ending June 26, OPIS previously reported.
Following the outbreak of war with Iran in late February, Saudi Arabia has more heavily utilized Aramco's 765-mile East-West pipeline for crude exports, a market participant told OPIS. The crude oil, collected from the Yanbu port, transits the Red Sea via Bab el-Mandeb for Asian refiners, creating a tense situation for the region if the chokepoint remains blocked. The participant added that the blockade could also adversely affect product flows in Europe, as more jet fuel and ultra low sulfur diesel barrels look for an alternative route through South Africa.
Despite the issue, the market participant speculated that limited Houthi resources may stymie the blockade.
A second market participant said that the chokepoint was not blocked as of Tuesday, adding that a blockade would raise both crude oil and freight costs globally.
The stoppage in product flows materializing from the new blockade would be "unprecedented" alongside the instability growing in the Strait of Hormuz, said Carl Larry, a subject matter expert in energy trading and risk at Enverus. The impact of the blockade would be "much more detrimental to supply than we're seeing right now," he said, resulting in "higher prices than maybe we saw before."
"I guess the real risk is that we don't know how long or how much it's going to happen," Larry said. "It's really going to be a market mover."
With the blockade expected to cut off supply in Europe and Asia, Larry said U.S. exports could increase, with the country having the ability to bring more oil and refined products online.
"If this supply to Europe and Asia starts to get pulled back, do we see another IEA Strategic Petroleum Reserve release?" Larry questioned. "The U.S. SPR is at its lowest levels we've seen since the 1970s. If this happens, again, we put ourselves deeper in the hole."
Bab el-Mandeb is "not officially but functionally closed," said Michael Mische, a professor at the University of Southern California. He said the blockade could pose a tense situation for an import-heavy region like California, which is dependent on South Korea and India for its fuel supply.
"India gets 50 percent of its oil through Bab el-Mandeb ... India's refineries, which provide a significant amount of fuel to California, will be operating at a reduced capacity if this persists," Mische said. "The workaround for that (blockade) is you go north through the Suez Canal, but the problem there is you can't get the VLCC tankers through the Suez Canal, they're way too big."
According to EIA, the Bab el-Mandeb limits tanker traffic to two 2-mile-wide channels for inbound and outbound shipments. Mische said crude could be transported using "considerably smaller" Suez Canal tankers moving through the Mediterranean Sea. However, the change in tankers could create supply backlogs, ultimately leading to transit times of 21 to 24 days. If those fuel supplies are headed to California, Mische said transit wait times could reach around 54 days.
"If this (blockade) persists to any degree, given the reductions in the strategic petroleum reserve all over the world, not just the United States, then you are looking at some additional supply concerns," Mische said.
A third market participant noted that some aspects of the market had already "priced in" the struggles coming through the Middle East in futures contracts, saying that people are expecting a longer term issue.
"It's just more risk. That's the biggest thing" the third source said. "The U.S. is going to be fighting two front battles now if that continues."
California is particularly vulnerable to global supply disruptions as the state imported about 61% of crude oil in 2025 and countries in the Persian Gulf played a significant role in the state's crude import flow, according to data released by the California Energy Commission. Crude supplies coming into California from the Persian Gulf region totaled nearly 30% of foreign-sourced crude, with Saudi Arabia accounting for 7.85%, Iraq 17.53% and the United Arab Emirates 3.35%.
While he does not anticipate a direct impact into the West Coast, Jaime Brito, executive director of refining and oil products at OPIS, said that losing about 3.2 million b/d from the Bab el-Mandeb route in the Red Sea will "imply a tighter balance."
"Crude traders will be competing even more for available spot cargoes around the world. And that could mean more competition or higher prices for U.S. West Coast crude importers," Brito said. "The net impact specific to the region is hard to anticipate, because, again, this is the global oil market, thousands of gears moving at different speeds, in different sizes, like a giant analog watch."
This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.
Reporting by Shaheer Naveed, snaveed@opisnet.com; Editing by Michael Kelly, mkelly@opisnet.com
(END) Dow Jones Newswires
July 24, 2026 14:03 ET (18:03 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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