The Houthi threat to the strategic Bab el-Mandeb Strait raises concerns of a major disruption to global oil supplies. This maritime passage, connecting the Red Sea to the Gulf of Aden, is crucial for worldwide crude oil trade and container shipping. If the Houthis target the Saudi pipeline at Bab el-Mandeb, the closure of this critical chokepoint could drive up WTI crude oil prices. Market participants are now pricing in an increased risk of oil flow disruptions, with potential impacts expected as early as late August 2026.
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