The Iran-backed Houthi militant group has taken control of Mokha, a key port city on Yemen's Red Sea coast, marking a significant setback for Saudi Arabia and its allied Yemeni forces.
This development is crucial as it enhances Iran's leverage in the ongoing conflict with the U.S. and raises concerns about the security of vital oil shipping routes, particularly the Bab el-Mandeb Strait and the Strait of Hormuz. The Houthis' advance could lead to increased threats to shipping in the Red Sea, which is already under strain due to the ongoing conflict.
Analysts, including Hamish Kinnear from Verisk Maplecroft, describe the capture as a 'major blow' to Saudi Arabia, suggesting that the Houthis could tighten their control over the Bab el-Mandeb Strait, a critical chokepoint for global oil trade. As tensions escalate, oil prices are expected to rise, with Brent crude futures trading around $105.37 per barrel and West Texas Intermediate at $100.76.
ING strategists highlight that while oil flows through the Strait of Hormuz continue, they remain below pre-war levels, indicating a fragile supply situation. The ongoing conflict and the Houthis' new position could further destabilize the region, impacting global oil prices and trade dynamics