Houthis Seize Mokha as Oil Tops $108 and Gulf Exports Choke

The latest:

Oil briefly climbed above $108 a barrel on Friday after Iran-backed Houthi fighters expanded their control of the Red Sea, seizing the Yemeni port city of Mokha from Saudi-backed government forces. The advance closes off the main workaround for Gulf crude at a moment when traffic through the Strait of Hormuz remains a fraction of prewar levels, The New York Times reported.

Details:

• The prices: Crude briefly topped $108 a barrel on Friday, roughly 50% above prewar levels, according to The New York Times. Average U.S. gasoline has passed $4 a gallon, more than $1 above a year earlier, and diesel — the workhorse fuel for trucking, farming and industry — crossed $6 a gallon the same day.
• The chokepoint: An average of 19 ships a day transited the Strait of Hormuz in September, down from 20 in August and a June high of 34, against roughly 130 daily before the war, per ship-tracking data. Kpler logged just nine crossings on Thursday.
• Saudi exports: Saudi oil exports fell last month to their lowest level in at least 13 years, the report said. Only two Saudi cargoes cleared the Bab al-Mandab Strait in the past week, according to Kpler, the maritime data firm tracking the route.
• The pipeline: The Saudi Energy Ministry said Friday that the East-West Pipeline, used as a substitute for Hormuz, had been targeted multiple times a day earlier and was shut down as a precautionary measure. The ministry did not say when it would restart.
• The casualties: At least 23 ships were struck in the waterway near Oman in July and August, and at least 22 sailors have been killed across the Middle East since the war began at the end of February, according to the report. “These waters aren’t safe,” said Michelle Wiese Bockmann, an analyst at the maritime intelligence firm Windward.
• The escort operation: The U.S. Navy has kept crude moving out of Hormuz along sea lanes hugging the Omani coast, opposite Iran, but at the cost of an extensive and dangerous operation. U.S. forces disabled or destroyed at least eight Iranian tankers in the past week, Wiese Bockmann said.
• Iran’s demands: Tehran has demanded an end to the U.S. naval blockade of its ports and the release of frozen assets abroad, and has repeatedly claimed it will retain control over the Strait of Hormuz. Iran restricted access to the strait after the first U.S. and Israeli strikes on Feb. 28.
• Washington’s options: Amos Hochstein, a foreign affairs and energy adviser in the Biden administration, said the Trump administration had used a range of tools effectively to hold prices down but is now stuck. Gregory Brew of the Eurasia Group framed the remaining choices as bombing or talking.
• The Saudi alternative: Riyadh can still ship crude north through a pipeline near the Suez Canal, but the Mediterranean route costs more and adds weeks to voyages to Asia, where most customers sit. Houthi strikes injured 73 civilians and hit energy facilities in southern Saudi Arabia days before the Mokha advance.

Background:

After the Feb. 28 strikes on Iran, Tehran restricted Hormuz traffic, turning Bab al-Mandab at the southern mouth of the Red Sea into the backup corridor for Middle East crude, particularly Saudi barrels. Houthi control of Mokha now narrows that alternative.

Between the lines:

Fawaz Gerges of the London School of Economics called Mokha a game changer for the Houthis and for Iran, arguing it hands the group leverage over Saudi Arabia and global trade and puts Tehran in a stronger position to inflict pain on the U.S. economy. With Hormuz constrained, the East-West Pipeline halted and Bab al-Mandab squeezed, each remaining Saudi export route now costs more or carries more risk.

What’s next

Watch whether the Saudi Energy Ministry restarts the East-West Pipeline, daily Hormuz transit counts, and the November U.S. midterms — Trump said this week the war would not end until after the vote but predicted prices would fall afterward.