The conflict in Yemen involving the Iran-backed Houthi movement and the Saudi-backed government threatens global energy supplies. Houthi military advances towards the strategic Bab al-Mandeb strait increase the risk of disruptions to vital shipping lanes. This development complicates diplomatic efforts between the US and Iran, lowering the odds for successful peace talks. Market views suggest WTI crude oil prices could exceed $150 in September 2026. The fragile truce in Yemen is increasingly vulnerable, and the likelihood of a US-Iran deal on reconstruction funding appears diminished.
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