Houthi Gains in Yemen Send Oil Prices Soaring Amid Pipeline Disruption Threat

The Houthi insurgency in Yemen has escalated to new heights, posing a significant threat to Saudi Arabia's security and global oil supplies. In recent weeks, the Iran-backed group has made rapid gains along the Red Sea coast, capturing several towns and islands near the Bab el Mandeb Strait.

The Houthis have also released footage showing their fighters capturing armored vehicles from Saudi-backed forces, while claiming to have shot down a Saudi F-15 fighter jet. Saudi authorities have not confirmed the aircraft's loss, but officials supporting the internationally recognized Yemeni government acknowledge that Saudi and allied forces are carrying out strikes against Houthi positions.

The escalation has brought the conflict closer to Saudi territory, with the Houthis launching attacks toward Saudi Arabia over the past week. The kingdom's air defenses intercepted a Houthi drone south of Mecca before it entered restricted airspace over the holy city. Riyadh described the incident as a serious escalation due to the threat to religious sites.

The renewed fighting is significant because global energy markets are already under pressure from disruptions caused by the wider war involving Iran. An attack blamed on Iran-aligned fighters in Iraq last week knocked out Saudi Arabia's East-West Pipeline, an important route that allows the kingdom to move oil without relying entirely on the Strait of Hormuz.

The pipeline disruption could affect as much as 4% of global oil supply, with traders estimating a prolonged closure would have severe consequences. Brent crude was trading around $108 a barrel on Wednesday, close to its highest level since May.