The flames of war are spreading in the Middle East! The Houthi forces have "joined the fight," and the "second largest energy corridor," the Bab-el-Mandeb Strait, is now at risk.

The flames of war are spreading in the Middle East! The Houthi forces have "joined the fight," and the "second largest energy corridor," the Bab-el-Mandeb Strait, is now at risk.

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The Houthi forces have officially joined the Iran war, bringing a new shock wave to the global energy market.

According to Xinhua News Agency, Yemen’s Houthi forces issued a statement on their controlled Masirah TV on the 28th, saying that the organization launched ballistic missiles at Israel in the early morning and that operations will continue until the aggression stops.

This move opens up a new front in the war, once again exposing the southern end of the Red Sea—Bab-el-Mandeb—to risk.

Saudi Arabia transports crude oil via the East-West Pipeline to Yanbu Port and then exports it through the Bab-el-Mandeb, which is the key alternative solution for oil transport after the Strait of Hormuz was blocked. Since March, Yanbu Port’s oil loading has risen to about 3.4 million barrels per day, and this week, daily flows have exceeded 5 million barrels, setting historic records.

Meanwhile, Iran launched retaliatory strikes on Saturday against Gulf Arab countries and Israel. Fires broke out in Abu Dhabi’s industrial zone in the UAE, Kuwait’s airport radar system was severely damaged by drones, and Oman’s Salalah port was forced to suspend operations.

The energy market’s expectation of a ceasefire has cooled. Brent crude closed at over $115 per barrel on Friday, an increase of about 60% since the outbreak of the conflict.

Houthi Entry Raises Risks for Bab-el-Mandeb

The Houthis’ entry into the war adds a highly sensitive energy-geographic variable to this conflict. Bab-el-Mandeb is a choke point connecting the Red Sea to the Gulf of Aden, alongside the Strait of Hormuz as one of the world’s two most critical energy shipping routes.

After the outbreak of the Israel-Hamas war in 2023, Houthi missile and drone strikes have effectively blocked most Western shipping companies from using this route; currently, this situation risks worsening further.

Notably, Saudi Arabia is exporting oil via Yanbu Port to bypass the nearly closed Strait of Hormuz, but the port is entirely within the range of Houthi missiles.

Bloomberg previously reported that the United States has issued warnings about the Houthis’ threat near Bab-el-Mandeb, and this potential risk is steadily rising as the situation escalates.

This means that Saudi Arabia’s alternative export route to deal with the closure of Hormuz is also facing direct threat. If Yanbu Port is hit, another key line of global crude supply will be shaken, and the "buffer solution" the market hopes for may fail.

Hormuz Still in Limbo, Negotiations Stalled

Hormuz Strait has been nearly closed since the US-Israeli coalition launched strikes against Iran on February 28. Normally, about one-fifth of the world’s oil and LNG are transported via this route.

This week, Trump pushed for talks, extending Tehran’s deadline to reopen the Strait of Hormuz to April 6, and put forward a 15-point plan, whose core conditions include:

Iran dismantling its nuclear facilities and reducing missile stockpiles, in exchange for eased sanctions. Iran rejected this proposal, insisting on war reparations, recognition of some form of control over Hormuz, and guarantees that the US and Israel will not attack Iran again.

According to media citing insiders, US Secretary of State Marco Rubio said in a call with G7 colleagues on Friday that the war would end within weeks, not months.

Trump’s envoy Steve Witkoff also said US-Iran talks may take place "this week", with Pakistan considered the most likely venue.

Saudi, Turkish, and Egyptian foreign ministers are expected to visit Islamabad from March 29-30 to consult on de-escalation efforts in the region.

Rumors of Ground Invasion Spread, Market Sentiment Under Pressure

By extending the deadline to April 6, Trump also gained more time for the US to gather forces in the region, fueling speculation about ground troop deployments.

According to media citing military analysts, if Trump decides to deploy ground forces, he might target Kharg Island in the Persian Gulf—a small island through which almost all of Iran’s oil exports pass.

The US might also seek to control the Iranian side of the Strait of Hormuz, to forcibly reopen the vital shipping route for oil, gas, and container ships, or send special forces to remove around 440 kg of highly enriched uranium from Iran.

Financial markets have responded to the sustained escalation: US stocks fell to seven-month lows on Friday, the US 10-year Treasury yield climbed to the highest level since July. Fuel shortages are worsening in many parts of the world; the Philippines has declared an energy emergency, and economists' concern about stagflation risks is rising.

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