Houthi Advance Closes Key Shipping Lane Amid Global Trade Concerns

The Houthi rebels in Yemen have advanced their position to capture key shipping choke points, raising concerns about global trade and energy supplies. The group has taken control of the Red Sea port of Mokha and a strategic island near one of the world's most important commercial lanes, the Bab el-Mandeb Strait.

The Strait had previously been used as a vital route for crude oil supplies from Saudi Arabia to Asia after shipping through the Strait of Hormuz was restricted due to the threat of Iranian attack. However, Houthi attacks on shipping through the Bab el-Mandeb Strait have led many companies to abandon the route, with traffic down by 60% since late 2023.

The capture of Mokha and Mayun (also known as Perim) puts the Houthis in a strong position to take further control if they want to. Richard Meade, editor-in-chief of Lloyd's List, noted that while the Houthi advance doesn't change the immediate risk profile for Saudi and Israeli shipping, it raises questions about whether the Houthis will expand their threats if they face further attack.

As a result, Saudi tankers have turned northwest instead of southeast from Yanbu and headed for the Suez Canal. However, this workaround is time-consuming and expensive, with ships taking 54 days to transit from the Suez Canal to an Asian destination like South Korea, compared to just 24 days before.