DUBAI/CAIRO, July 20 - Yemen’s Iran-aligned Houthis said on Monday they were imposing a naval blockade on Saudi Arabia, a move that opens a new front against the United States in its war on Iran and widens the threat to global energy supplies and trade beyond the Gulf.
Iran had pressed the Houthis to close the Bab el-Mandeb gateway to the Red Sea if the U.S. continued to attack Iranian power infrastructure.
They said the decision was in response to what they called “an unjust and oppressive siege” imposed on Yemen by the Saudis.
The full closure of the Bab el-Mandeb strait would reduce global oil supply by 7% as it would leave most of Saudi oil exports unable to leave the region. The disruption would add to the massive cut to global oil flows from the war in the Gulf, which has already reduced shipments by 10% of global supply.
Bear in mind that as refineries are destroyed or damaged, that means a lot less crude oil is being consumed by the refineries. The price of crude can legitimately go down even if some of the crude oil supply is destroyed in a situation where even more of the demand is also being blown up. Ukraine blowing up Russian refineries means that they don’t have much in the way of refined products like gasoline to sell but because those refineries are no longer consuming the crude oil they are having record crude oil exports. Doesn’t make them nearly as much money as the refined products though which are in a squeeze.