Oil prices spike as Houthis seize Red Sea chokepoint

More oil is flowing out of the Persian Gulf each day through the Strait of Hormuz, which until recently was completely choked off. So why do oil prices keep climbing upward every few days?

The simple answer is that it is not because of the Iranians. The more complex answer is that even though Iran's chokehold on global energy markets at the Strait of Hormuz has weakened, the axis still has cards to play.

While the US fleet dredged new underwater shipping channels and cleared the ocean floor to create a new route bypassing the Strait of Hormuz, a new conflict has erupted on the other side of the Arabian Peninsula that threatens global trade no less than Hormuz did.

Even as the American military managed to create conditions under which nearly the same volume of oil that once passed through the strait now flows covertly each night, the fighting between the Saudis and the Houthis has escalated. The Yemeni terror group has captured large sections of the critical Red Sea coast, including Perim Island, which divides the entrance to the Red Sea in two.

Perim Island, recently captured by the Houthis (Photo: AI illustration, no credit)

The Houthis themselves have demonstrated an even more destructive capability than the Iranians when it comes to international shipping. Over recent years, the Houthis have caused tens if not hundreds of billions in economic damage, including hijacking ships, bombing them, and sinking them.

Beyond all this, even though the Houthi move serves the Iranian interest in creating international economic chaos, the Houthis have also shown a high degree of willingness to act independently, with virtually no ability for outside actors to impose their will on them.

In the past week alone, since the renewed heating up of the Yemeni front, regional oil prices have jumped back into the $100-plus range. The Brent index, which tracks oil prices for Asia, the Middle East and Africa, stands at nearly $105 a barrel, a rise of close to five percent in just a few days.

Global oil prices are also absorbing the impact. Since Saudi Arabia announced, following Houthi strikes on its pumping infrastructure, that it would be unable to supply its monthly oil shipments to Europe, the global oil price has also spiked by nearly 5 percent.