Houthi Rebels' Escalating Attacks Drive Oil Prices Higher
The Houthi rebels have been a thorn in the side of Israel, Saudi Arabia, and international shipping routes for years. They first garnered international attention by attacking ships off Yemen three years ago, but their influence has only increased since then.
The group began as a religious revival movement for the Zaydi sect of Shia Islam in far-north Yemen in the 1990s. They rose up against the government and took control of the country's capital, Sanaa, in 2014, leading to a devastating civil war that killed over 100,000 people.
The conflict has been ongoing since then, with the Houthis backed by Iran and Saudi Arabia supported by a coalition including the US. The Houthis have also targeted Israel and Red Sea shipping routes, attacking vessels and killing sailors.
The current ceasefire is collapsing, and it could mean civil war for Yemen, which would be another warning sign for global commodity prices. The Houthis' goal is to control all of Yemen under a strict Shia theocracy, and they view themselves as a coequal partner to Iran rather than an Iranian proxy.
The cost of shipping oil in the largest tankers has hit record highs due to the wave of attacks, while global oil prices are on track to end the week above $100 US a barrel for the first time since July. The Suez Canal shipping route is one of the world's most important routes for global seaborne commodity shipments.