The Houthis have created a new front in the Middle East war that’s pushing up oil prices

The reported shutdown of Saudi Arabia's East-West pipeline and the Houthis' effective control of the Bab al-Mandeb Strait mark a significant escalation in the Red Sea crisis. Bab al-Mandeb is one of the world's most important maritime chokepoints, funnelling a substantial share of seaborne oil and liquefied natural gas between the Gulf and Europe. The East-West pipeline has served as a partial workaround, carrying crude across Saudi Arabia to the Red Sea coast and bypassing the Strait of Hormuz.

If both routes are constrained simultaneously, the options for moving Gulf crude to Western markets narrow considerably, which helps explain the upward pressure on oil prices. Markets typically price in not just the physical disruption but also the heightened risk premium attached to any cargo transiting the region.

What to watch: confirmation of the pipeline's status and duration of any outage, whether shipping traffic through Bab al-Mandeb recovers, and whether alternative routes such as the SUMED pipeline or the Cape of Good Hope see increased use. Sustained disruption would keep volatility elevated in energy markets and raise freight and insurance costs for regional trade.