https://ecfr.eu/article/the-paradox-of-intervention-how-us-strikes-in-yemen-empowered-the-houthis/
The Iran-aligned Houthi movement has declared a ban on Israeli-linked vessels in the Red Sea and has recently attacked two commercial ships in the Gulf of Aden. This escalation raises concerns of a potential closure of the Bab el-Mandeb Strait, which, alongside Iran’s blockade of the Strait of Hormuz, threatens a substantial portion of the world’s oil and gas shipments. The Red Sea has become a critical route for Persian Gulf exports since the closure of Hormuz earlier this year. Analysts warn that continued or intensified Houthi activity could lead to a significant spike in oil prices, possibly reaching $200 per barrel if the Bab el-Mandeb is fully obstructed.
Key Takeaways
Current market pricing suggests a low probability of 3.6% for Houthi attacks by July 17, 2026, but this increases to 51.5% by August 31, 2026.
The recent drop in odds for short-term action may indicate market participants perceive decreased immediate risk, despite heightened tensions.
