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We’re running out of ways to get oil out of the Middle East

Saudi Arabia had found a workaround for the Strait of Hormuz. Then the Houthis showed up.

There was a backup plan for getting oil out of the Middle East. We may need another one.

After staying relatively quiet for much of the Iran war, Yemen’s Houthi rebels launched a major escalation last last week by carrying out attacks on Saudi tankers and oil infrastructure, threatening a return to the campaign against Red Sea shipping last seen during the Gaza war in 2023 and 2024.

A “double chokehold” on Mideast energy has been one of the nightmare scenarios of the Iran war. With traffic through the Strait of Hormuz at a standstill, Saudi Arabia has dramatically increased the amount of oil it ships out through the Red Sea — one of the main reasons why oil prices have not risen as much as many expected during this conflict.

Though they are allies of Iran, the Houthis have their own agenda and say their campaign is targeting Saudi Arabia specifically, but there’s a real risk it could expand, and test the global energy industry’s ability to adapt.

On July 20, the Iran-backed Yemeni rebel movement known as the Houthis declared a “blockade” against their long-time enemy Saudi Arabia, and a short time later attacked two Saudi oil tankers in the Red Sea. Shortly afterward, several ships carrying Saudi crude oil through the Red Sea made abrupt U-turns to avoid going near the Yemeni coast.

With Iran now blocking shipping through the Strait of Hormuz, the Red Sea was supposed to be an alternative way to get oil out of the Middle East and to the world market. Now, though, the importance of the route has merely created fresh leverage in the long-simmering conflict between the Houthis and their longtime enemies in Saudi Arabia. These attacks were a major factor in pushing oil back over $100 a barrel last week.

The Houthis have their own agenda partly unrelated to the Iran conflict. But in launching the Iran conflict, the US has inadvertently given them outsized influence in the region: The sea lane they control is more important than ever. Now, in opening up a new front, they may have just made the war harder to end.

The Red Sea has become increasingly important to Saudi Arabia and energy markets as shippers have avoided Hormuz in recent months. Saudi Arabia has diverted around 70 percent of its oil exports via a pipeline connecting the oil fields on the Persian Gulf to the port of Yanbu on its Red Sea coast. This means that tankers need to use the Red Sea to get oil to Asia. As a result, the Red Sea now accounts for around 7 percent of the world’s energy supplies.

This release valve is one reason why the price of oil — and the price of gas for American drivers — has not risen as much as many experts........

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