Houthi Seizure of Red Sea Islands Pushes Brent Above $100, Threatens Global Energy Corridors

Houthi rebels have seized the strategic Greater and Lesser Hanish islands in the Red Sea near the Bab el-Mandeb strait, threatening international shipping lanes and Saudi Arabian crude export routes, according to Indian outlet India Today. The maritime disruption coincides with drone strikes that have damaged Saudi Arabia's east-west pipeline, a key alternative route bypassing the Strait of Hormuz. Brent crude oil prices have surged above $100 per barrel on fears of wider supply shocks.

The Houthi advance along the Red Sea coast has shocked observers, The Guardian reported, with more than 100,000 people forced to flee in a country where half the population already depends on humanitarian aid. The Iran-backed rebels now effectively control the Bab el-Mandeb strait, the other major regional energy chokepoint after Hormuz.

The east-west pipeline — which Saudi Arabia had relied on to move crude to Red Sea ports during the Iran war — has been shut by drone strikes attributed by The Guardian to an Iran-backed militia in Iraq. One estimate cited by The Guardian suggests a month-long closure could cut global crude supply by 120 million barrels. The halt to shipping through Bab el-Mandab could be far more protracted.

Damage to the pipeline has forced Saudi Arabia to pivot back to oil exports via the Strait of Hormuz, according to a note by Rabobank strategist Bas van Geffen published on Zero Hedge. Rabobank reported that Bloomberg has confirmed Saudi Arabia is increasing sales of spot cargoes for ship-to-ship delivery in the Gulf of Oman, meaning the kingdom now bears the risk of transporting crude through Hormuz. tanker tracking data cited by Rabobank showed Saudi Arabia loading 8.7 million barrels of crude oil on September 15 at its east coast terminals. Rabobank also noted rumors that the Houthis have laid mines in the waterway, constraining tanker movements.

The United States has responded on multiple fronts. The House of Representatives advanced the Lindsey Graham Sanctioning Russia and Iran Act of 2026, which proposes tariffs of up to 100% on major purchasers of Russian energy, including India and China, India Today reported. Simultaneously, US CENTCOM convened a closed-door security conference in Germany with Israeli and Arab military commanders to coordinate responses to regional threats.

The supply shock is rippling through financial markets. US Senate Majority Leader Thune said he is "open to exploring" a diesel export ban to ease domestic price pressures, Rabobank reported. Central banks face a tightening bind: interest rates are rising in tandem with energy prices, and markets have priced multiple rate hikes from the ECB and the Fed, though anonymous sources told MNI News that the ECB's next move is unlikely before December, according to Rabobank.

The Guardian noted that Saudi Arabia had painfully extracted itself from its war with the Houthis and hoped to preserve the 2022 truce after Iran's leadership fled to Sana'a in July, but that bombing Sana'a airport gave the Houthis an opportunity to escalate. The rebels are not mere proxies for Tehran, The Guardian said, but their interests are increasingly aligned due to the US-Iran conflict. The forces ranged against the Houthis — including the internationally recognized government and southern secessionists — are more fractured than ever. The United Arab Emirates withdrew its troops at the turn of the year.

Saudi strikes alone will not be enough to push the Houthis back, and President Trump has rebuffed requests for help, The Guardian reported. The rebels have stated they are targeting only Saudis, but their leverage could be used more broadly. They are now closer than ever to Djibouti, which hosts US, Chinese and other military bases.

The Saudis face a choice between negotiations with an emboldened enemy making increasingly maximalist demands, or returning to full-scale war with little support, The Guardian reported. Turkey and Pakistan are not rushing to act on a new Mecca defense pact signed in August. Yemen's recent history, The Guardian concluded, demonstrates the futility of seeking a military solution, and outside parties should prioritize a resolution to the Iran war — without which regional danger will only grow.