Business
Houthi Threat to Red Sea Shipping Raises Risk of Oil-Supply Shock
The oil market could be pushed into deeper turmoil if Yemen’s Houthi militants resume attacks on shipping in the Red Sea. The group’s previous campaign against international shipping disrupted trade by forcing tankers and container ships to take longer routes to and from Asia. Now, energy analysts warn that renewed attacks could remove a significant volume of oil from global supply and drive up prices.
Saudi Arabia has been diverting as much crude oil as possible away from the Persian Gulf to its Red Sea port of Yanbu, from where cargoes are shipped mostly to Asia. While this hasn’t fully offset volumes unable to transit the Strait of Hormuz, it has helped limit the rise in global oil prices.
If Houthi attacks make it too dangerous for tankers to approach Yanbu, several more million barrels of crude each day would be stranded in the Middle East, analysts say. Saudi Arabia might then be forced to join Kuwait and Iraq in slashing production.
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