Another critical oil chokepoint is in firing line after Iran threats

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Proxy forces are already in play, with Yemen’s Houthi rebels ramping up missile attacks on Saudi targets since 2017 thanks to help and guidance from Tehran.

Just on Wednesday, Riyadh announced that two Saudi oil carriers were attacked by Houthi missile strikes in the Bab el-Mandeb Strait, which separates Yemen and East Africa and connects the Gulf of Aden to the Red Sea. The kingdom has temporarily suspended all oil shipments through the pass.

“This can be read as a success for Tehran,” said Behnam Ben Taleblu, an Iran-focused research fellow at the Foundation for Defense of Democracies in Washington, D.C.

The Houthi strikes, and Soleimani’s direct reference to the Bab el-Mandeb on Thursday, “is a signal that Tehran has options for escalation.”

Bab el-Mandeb sees about 5 million barrels per day (bpd) of oil, which is small compared to the 17 million that passes through the Strait of Hormuz, on the opposite side of the Arabian Peninsula. Hormuz sits on the peninsula’s eastern flank, and is the only sea passage from the Persian Gulf to the open ocean.

But the fear here, said RBC Capital Markets’ Helima Croft, head of global commodity strategy, is that increased Houthi rebel attacks on tankers heightens the chance that one will actually be sunk.

In that event, the U.S. “could be forced to become more actively engaged in ensuring maritime security, like during the tanker wars,” of the Iran-Iraq war, Croft said, referencing an incident in 1988 where the U.S. came into direct conflict with Iran after Iranian sea mines blew up part of an American missile frigate. The U.S., which supported Saddam Hussein in the Iran-Iraq war, subsequently destroyed roughly half of Iran’s naval facilities.

A crisis in the Bab el-Mandeb would trigger greater fears over incidents in Hormuz and send oil prices upward. And while it would be difficult for Iran to close the Straits for a prolonged period, “it could carry off one-off attacks on vessels,” she warned.

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