Experts warn that the Iran-backed Houthis have the potential to create a disastrous economic shock around the world.
If the Houthis ramp up their role in this conflict by targeting vessels in the narrow Bab el-Mandeb Strait off the Red Sea, it would not only further push up oil prices but also destabilise “all of maritime security,” said Ahmed Nagi, a senior Yemen analyst at the International Crisis Group, a research institution. “The impact would not be limited to the energy market.”
Iranian-backed Houthi rebels entered the month-old war in the Middle East on Saturday, claiming a missile launch that Israel said it intercepted.
As Iran strangles the Strait of Hormuz, countries have scrambled for alternative routes. Bab el-Mandeb, at the southern tip of the Arabian Peninsula, is particularly crucial as it controls traffic for vessels heading to the Suez Canal through the Red Sea. To get around the Strait of Hormuz closure, Saudi Arabia is sending millions of barrels of crude oil a day through the chokepoint.
About 12 per cent of the world’s trade typically passes through that waterway, including oil, natural gas, grain and everything from toys to electronics.
AP
