Concerns about another worldwide oil supply shock are mounting after Yemen’s Houthi rebels reportedly seized the strategically located Greater and Lesser Hanish islands in the southern Red Sea, following an assault on a Saudi pipeline.
Brent crude climbed 1.17 per cent to $106.92 a barrel on Tuesday morning. US diesel prices also broke above $6 a gallon for the first time last week, as the conflict—alongside Ukrainian attacks on Russian refineries—placed further pressure on already strained global fuel supplies.
Saudi Arabia has been forced to reroute its oil exports away from the Persian Gulf after Iranian attacks disrupted shipping through the Strait of Hormuz, the waterway’s only outlet.
The kingdom has instead depended on its 1,200-kilometre East-West Pipeline, which crosses Saudi Arabia and carries crude from Gulf terminals to Yanbu on the Red Sea. Oil can then be loaded onto tankers bound for international markets.
However, Saudi authorities shut the pipeline after Thursday’s strike, which Riyadh attributed to drones launched by Iranian-backed militias operating in Iraq.
Officials have warned that repairs—including work at a key pumping station—could last between three and five weeks.
One official said limited operations might resume while repairs are under way, although there was no estimate of how much crude could continue moving through the system.
According to an analysis released Monday by Norway-based research company Rystad Energy, the pipeline has transported between 2.6 million and four million barrels a day since late August. A complete shutdown would remove that volume from the market.
Satellite images comparing the Saudi East-West Pipeline before the attack, above, and afterward, below
Ships pass through the Bab el-Mandeb Strait near Yemen’s southern coast
Rystad said the market could absorb the disruption in the short term, but cautioned that a prolonged outage would force a substantial reshuffling of crude supplies worldwide.
At the same time, Yemen’s Iran-aligned Houthi movement appeared to broaden its threat to Saudi shipping routes in the Red Sea after taking control of Greater and Lesser Hanish, according to government and Houthi officials on Monday.
The islands are positioned about 160 kilometres north of the Bab el-Mandeb Strait, a crucial maritime bottleneck linking the Red Sea with the open ocean and providing access to Saudi Arabia’s major Asian customers.
The capture places Houthi forces roughly 20 miles from a US military base in Djibouti, the small Horn of Africa nation located across the Bab el-Mandeb.
For more than a month, the Houthis have targeted Saudi oil facilities and vessels operating in the Red Sea. The campaign has added upward pressure to global oil prices while strengthening Iran’s position in its confrontation with the United States.
Houthi threats have kept the Kingdom on high alert, with air raid warnings sounding across the country daily, while a series of ballistic missile and drone attacks by the group wounded 13 civilians on Monday.
The Houthi advances have seemed to come with little resistance from Saudi-backed Yemeni government forces.
The rebels deployed on the Hanish islands after hundreds of government-allied forces withdrew from the archipelago, according to two government officials and a Houthi official.
Last week, the rebels seized the port city of Mokha and the island of Mayun, inside the Bab el-Mandeb Strait.
Government forces are now attempting to rally and fight back. On Sunday, the military said it launched airstrikes on Houthi positions in Mokha, the coastal town of Dhubab and elsewhere in Taiz province.
A rebel spokesman said the Houthis fired dozens of missiles and drones at the King Khalid Airbase in the southern Saudi city of Khamis Mushait, targeting hangars, radar installations and ammunition depots.
The statement on Monday by Brig. General Yahya Saree did not specify when the strikes took place but the Houthis often take hours or days to claim responsibility for attacks.
Maj. General Turki al-Malki, a Saudi military spokesman, said the attacks struck civilian areas in Khamis Mushait and other nearby cities, injuring 13 civilians and damaging several houses and vehicles. He did not say whether the airbase had been hit.
The Iran war has gouged Saudi oil production, which was down to six million barrels per day in August from nearly ten million in September the previous year, according to the International Energy Agency.
After the war began, the east-west Pipeline carried a large majority of Saudi Arabia’s oil exports, according to Rystad Energy.
When Houthi attacks in the Bab el-Mandeb Strait started in late July, most of the tankers from the port of Yanbu turned north in the Red Sea toward the Mediterranean, sending their cargo through the Suez Canal or an Egyptian pipeline.
That, however, dramatically increased the time and cost of delivering oil to Saudi Arabia’s main clients in Asia. Also, the Houthis turned to targeting Saudi shipping in the northern Red Sea as well.
The fighting in Yemen is pushing the impoverished nation back into full-fledged civil war, after a truce that largely maintained quiet since 2022.
Supporters of Yemen’s Houthi rebels chant and raise rifles during a rally organized to celebrate the group’s capture of Mayun Island on September 11
A person passes by a display of Houthi-made mock drones and missiles at a square in Sana’a, Yemen
A woman washes clothes at a makeshift camp for people displaced by clashes between Iran-aligned Houthi fighters and Saudi-backed Yemeni government forces
Even as they advance along the Red Sea, the Houthis have waged an offensive farther inland, particularly in the longtime battleground province of Taiz.
The World Health Organization said more than 500 people were killed in Yemen in the last week alone, up from nearly 200 a week earlier.
The Houthi rebels have made strategic gains in lightning advances, capturing territories previously held by forces of the internationally recognized government.
The fighting has also displaced nearly 94,000 people who have since fled their homes.
‘Many of them don’t have enough food or water as they had to flee with whatever they could carry. In some areas, whole villages have reportedly emptied,’ said Khanzad Shah, acting head of Islamic Relief, a charity that operates in the area.
Around 200 schools have been converted to shelters in southwestern Yemen to absorb an influx of families, said Basma Alloush, deputy director of communications at the International Rescue Committee, an aid group.
The fighting threatens to reignite a war that for more than a decade brought disaster to Yemen, killing more than 150,000 people and driving the country to the brink of famine.
Since 2014, the Houthis have controlled the north, including the capital, Sanaa, and much of the western heartland of the country where most of the population is located.
The internationally recognized government, backed by an array of disparate militias, controls the south and east, including the key southern port of Aden.
Meanwhile, Iranian Foreign Ministry spokesman Esmail Baghaei said Monday that Saudi Arabia had ‘demanded’ that a meeting bringing together Iran with other regional countries to discuss the Strait of Hormuz be scrapped ‘for the time being’.
Baghaei called the meeting, which was to be hosted by Oman, a ‘proper opportunity’ to restore security in the region.
The spokesman said that an agreement between Iran and Oman on the Strait of Hormuz has been finalized and it will be announced later.
Saudi Arabia had submitted amendments to the agreement, citing concerns that it could have lasting implications for the Strait of Hormuz, negatively affecting other Gulf Co-operation Council countries, according to a Gulf official.
