Houthis Escalate Attacks on Saudi Oil Infrastructure with Iranian Backing

The Houthi group in Yemen has been escalating its attacks on Saudi Arabia's oil infrastructure with the backing of Iran. The Houthis have been closing off key shipping lanes, including the Bab el-Mandeb Strait, which handles up to 12% of global crude oil flows and 10% of LNG flows. This move is expected to further disrupt global energy supplies and drive up prices.

A senior energy source close to Iran's Petroleum Ministry told OilPrice.com that the Houthis will soon 'officially' close off the Bab el-Mandeb Strait to all 'enemy' shipping, effectively holding hostage 12% of crude oil flows and 10% of LNG flows. This is a significant escalation of the conflict in the region.

The recent seizures by the Houthis of several key islands in the Red Sea give the group and Iran greater leverage over the Red Sea/Suez Canal transit route. The International Monetary Fund's PortWatch data shows that shipping through the Bab el-Mandeb Strait has dropped nearly 90% below normal averages, even without the Houthis declaring a general blockade.

The US refusal to help Saudi Arabia militarily against the Houthi threats has been confirmed by Iranian and Washington sources. The US has instead opted for emergency intelligence-sharing coordination with Saudi Arabia, which has not authorized any military assistance. This move has left Saudi Arabia feeling isolated in its fight against the Houthis.

The inclusion of Djibouti in the Multinational Maritime Defense Coalition (MMDC) is unlikely to provide much support to Saudi Arabia's efforts to quell the Houthi threat, as China's influence over the country through its Belt and Road Initiative is significant. This may limit Beijing's willingness to take action against Iran or the Houthis.