Why the Houthi Threat to Red Sea Shipping Poses a Bigger Risk to Oil Markets This Time

June 8 – Yemen’s Iran-aligned Houthis declared on Monday that they would bar ships linked to Israel from the Red Sea, following Israel’s latest military campaign against Iran. The move has heightened concerns about the security of global shipping and energy supplies, already strained by months of conflict.

Below is a breakdown of why this matters, what it means for the broader Iran war, and how it could reshape the global energy landscape.

How serious is the threat to global energy markets?

Since late February, when Israel and the United States struck Iran, Tehran has effectively closed the Strait of Hormuz — a chokepoint that normally handles about a fifth of the world’s oil supply. That disruption halved most crude and fuel exports from the Gulf, sending prices soaring and creating what analysts call the worst energy shock in decades.

Saudi Arabia responded by rerouting more than 70% of its daily crude exports to the Red Sea port of Yanbu. That shift has been a critical lifeline, keeping global oil prices from climbing even higher.

Now, any sustained Houthi interference with Red Sea shipping — whether through direct attacks on vessels or port infrastructure — could have far greater consequences than during the group’s previous campaign in late 2023. Back then, Gulf oil exports were flowing freely through the Strait of Hormuz, so diversions around Africa merely added cost and time. This time, much of that oil is already sitting on Red Sea tankers or waiting to be loaded at Yanbu.

A Houthi source told Reuters that barring Israeli ships from the Red Sea was “a first step.” If the escalation continues, the group warned, it could block all vessels heading to Israel, and possibly take further measures.

During the Gaza war, the Houthis targeted ships they deemed linked to Israel, including any vessel whose parent company had used Israeli ports. That campaign effectively scared off most major shipping lines from the Red Sea route.

Who are the Houthis?

The Houthis emerged in northern Yemen in the 1990s as a military, political and religious movement rooted in the Zaydi branch of Shi’a Islam. After the 2011 Arab Spring protests, they deepened ties with Iran and exploited the ensuing instability to seize the capital Sanaa in 2014, derailing a Gulf-backed political transition plan.

Saudi Arabia and its Arab allies launched a military intervention months later, aiming to restore the ousted government and dislodge a group they viewed as an Iranian proxy — Riyadh’s arch-rival. But the Yemeni civil war soon settled into a stalemate.

During the conflict, the Houthis used missiles and drones to strike oil facilities and other infrastructure in Saudi Arabia and the United Arab Emirates. A 2022 truce between the warring parties has largely held, but tensions remain.

Are the Houthis an Iranian proxy?

Iran portrays the Houthis as part of its regional “Axis of Resistance,” alongside Lebanon’s Hezbollah and Iraqi Shi’ite militias. However, the relationship is less direct than with those other groups. The Houthis do not recognize Iran’s supreme leader as their ultimate religious authority, as Hezbollah and the Iraqi factions do. Their motivations are primarily domestic, though they share Iran’s ideological opposition to Israel and the United States.

Washington accuses Iran of arming, funding and training the Houthis, with help from Hezbollah. The Houthis deny being a proxy and claim they develop their own weapons.

What happened when the Houthis attacked Red Sea ships before?

After Hamas’s October 7, 2023 attack on Israel and the ensuing Israeli campaign in Gaza, the Houthis began firing at Israel and targeting international shipping in the Red Sea, saying they were acting in solidarity with Palestinians.

The attacks upended global supply chains. Maersk, Hapag-Lloyd and other major carriers diverted vessels around Africa’s Cape of Good Hope — a much longer and more expensive route. A U.S.-led naval coalition launched strikes on Houthi positions and conducted a defensive campaign, shooting down hundreds of drones and missiles.

Still, some attacks persisted until last summer and only stopped completely after the Gaza ceasefire in October 2024.

What have the Houthis done during the latest Iran war?

In contrast to Hezbollah and Iraqi militias, which joined the conflict early with rocket and drone fire after the first U.S. and Israeli strikes on Iran, the Houthis have been noticeably quiet.

On March 5, the group’s leader Abdul Malik al-Houthi said: “Our fingers are on the trigger at any moment should developments warrant it.” Iranian military commanders, including Quds Force chief Esmaeil Qaani, warned as recently as June 1 that the Houthis could choke off the Red Sea. Yet aside from a few missile and drone attacks on Israel in late March and early April, the group had not escalated.

It is unclear why the Houthis have remained relatively restrained. Several explanations are possible: they — along with Iran — may be using the threat of closing another major energy route as a warning to Israel and the United States against further escalation. The group may also feel less bound to defend Iran than Tehran’s other allies. And it may be wary of antagonizing Saudi Arabia, its powerful and wealthy neighbor, risking a resurgence of conflict at home.

(Compiled by Angus McDowall; editing by Jason Neely)