Houthi Threat to Bab al-Mandab Strait Poses Seismic Risk to Global Economy
The Bab al-Mandab strait, a critical shipping route, is under threat from Houthi rebels, raising fears of a blockade that could severely impact the global economy. This development follows the closure of the Strait of Hormuz, which has already strained oil supplies worldwide. Yemen's Houthi military spokesman has claimed responsibility for a missile attack on Israel, and their involvement in the Iran war heightens concerns over another vital Middle Eastern waterway being effectively closed to oil tankers.
Strategic Importance of Bab al-Mandab
Like the Strait of Hormuz, the Bab al-Mandab strait serves as a chokepoint for petroleum and liquefied natural gas shipments. It is a crucial link in the maritime trade route connecting the Mediterranean Sea to the Indian Ocean via the Red Sea and Suez Canal. While the Strait of Hormuz handles about one-fifth of global oil and gas transit, Bab al-Mandab's closure would deliver another blow to economies dependent on Middle Eastern imports.
Geographically, the Bab al-Mandab strait, known as the "Gate of Tears," lies between Djibouti and Yemen, spanning approximately 50km in length and 16km in width. It provides access to key ports such as Saudi Arabia's Yanbu, Djibouti's Doraleh, Eritrea's Assab, and Somalia's Kismayu.
Economic Impact and Current Crisis
The global economy is already reeling from the Strait of Hormuz closure, controlled by the Islamic Revolutionary Guard Corps. Countries are grappling with rationing and high prices, as evidenced by:
- The Philippines declaring an energy emergency, with fuel reserves lasting only 45 days.
- India rationing cooking gas.
- Sri Lanka implementing a four-day working week.
- Bangladesh deploying troops to prevent fuel hoarding.
Brent Crude prices have surged to $107 per barrel, up from $78 before the Iran war, reflecting market volatility. Hundreds of commercial vessels remain stuck in the Strait of Hormuz, exacerbating supply chain disruptions.
Historical Context and Recent Trends
Between 2020 and 2023, Bab al-Mandab saw daily oil transit peak at 9.3 million barrels, according to the US Energy Information Administration. However, systematic Houthi attacks on ships associated with Israel reduced this to 4.1 million barrels in 2024. The International Monetary Fund reports a 50% drop in Suez Canal trade and a 32% decline in Panama Canal trade in early 2024, leading to:
- Soaring insurance costs for shipping.
- Major firms rerouting vessels via the Cape of Good Hope, adding 10-14 days to journeys.
Potential Catastrophe of Closure
Closure or disruption of Bab al-Mandab, combined with the Strait of Hormuz situation, could be catastrophic for world trade, cutting off energy supplies. Saudi Arabia relies on Bab al-Mandab to export crude through Yanbu port, using an east-to-west pipeline pushed to its maximum capacity. Matthew Wright, a freight analyst at Kpler, warns that Yanbu is the most active port in the Middle East, and any disruption there would severely impact crude exports.
Recent data shows 4.6 million barrels per day loaded at Yanbu over two weeks, triple the 2025 average. Previously, experts estimated 2.5 to 3 million barrels daily from Yanbu. Losing this volume, amid the 15 million barrels absent from Hormuz, poses a major problem for global markets.
Broader Implications
The Houthi threat underscores the fragility of global shipping routes and the interconnectedness of Middle Eastern conflicts with worldwide economic stability. As tensions escalate, nations must prepare for potential supply shocks and explore alternative energy strategies to mitigate risks.
