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Houthi forces holding Mokha and Perim threaten the Red Sea bypass for Gulf oil as Saudi sites are hit, keeping the crude oil price near $103 a barrel.
- Houthi forces took Mokha on September 10 and Perim Island a day later, putting them at the mouth of the Bab el-Mandeb Strait.
- Saudi Arabia's Red Sea export route, the main alternative to Hormuz, has been hit by pipeline strikes and a suspension of Yanbu loadings.
- Brent traded near $103 a barrel after peaking around $108, with flows through the East-West pipeline restored to about 3.5 million barrels per day.
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Iran-backed Houthi forces have captured the Yemeni port of Mokha and the strait island of Perim, and are striking Saudi energy sites. The advance puts the Red Sea shipping lane under threat. That lane has served as the main alternative to the Strait of Hormuz during the US-Iran war. The crude oil price has stayed above $100 a barrel for much of the period since fighting in Yemen resumed in July. Brent futures stood near $103 in the latest session.
What Happened at Mokha and Bab el-Mandeb?
Houthi forces took Mokha, in Taiz province, on September 10, and government forces withdrew in what they called a tactical retreat. The next day the Houthis seized Perim Island, known in Arabic as Mayyun, which sits in the middle of the Bab el-Mandeb Strait and splits it into two shipping channels. They also took the Hanish Islands, roughly 100 miles to the north.
The strait carries about 12% of world trade in peacetime. Perim lowers the cost of targeting vessels in both channels. On September 13, Yemeni government forces said they had recovered some territory near the strait. Front lines have since stabilized, and the coalition reported 97 targeting operations against Houthi positions on the Taiz axis and the Tor al-Baha front in the latest round of fighting. Government forces said at least 260 Houthi fighters were hit and 44 vehicles destroyed or disabled.
How Have the Houthi Strikes Hit Saudi Energy?
The Houthi strikes have targeted Saudi Arabia's southwest, where oil, refining and export infrastructure is concentrated. On September 8, the group hit Abha, Khamis Mushait, Jizan and Najran. Targets included the Jazan industrial complex and King Khalid Air Base, and the Saudi Energy Ministry reported fires at several oil and utility installations.
On October 4, the Houthis claimed a ballistic missile and drone attack on a Saudi Aramco (2222.SR) facility in Riyadh. They said it caused fires. The coalition called the claim misleading. Fighting in Yemen resumed in July after a truce in place since 2022 collapsed, and hundreds of thousands of people have been displaced.
The Red Sea route had already been under pressure. Brent rose above $100 on July 22 after a Houthi attack on at least one Saudi tanker. On September 10 and 11, drone strikes launched from Iraqi territory knocked out the 7 million barrel-per-day East-West pipeline, which carries crude from Saudi Arabia's Gulf coast to Yanbu on the Red Sea. Aramco suspended Yanbu loadings and Brent reached about $108. The 400,000 barrel-per-day SAMREF refinery at Yanbu cut output by roughly half.
Why Does the Red Sea Route Matter So Much Now?
The Red Sea matters because it is the only large-scale outlet for Saudi crude that bypasses Hormuz. Flows through Hormuz averaged 13.2 million barrels per day over a recent seven-day period, or 77% of prewar levels. That leaves the market without spare transit capacity if a second chokepoint closes.
Aramco restarted the East-West pipeline less than two weeks after the attack. Flows have been restored to about 3.5 million barrels per day, against a target near 4 million, and Red Sea exports recovered enough to pull prices lower on September 29. The recovery is partial. The pipeline is still operating at roughly half of its design capacity, and Yanbu sits within range of Houthi missiles and drones.
Tankers leaving Yanbu must pass through the Bab el-Mandeb Strait to reach Asia, so Houthi control of Perim and the Yemeni coast adds a second exposure to the export route. Insurers have already raised war-risk premiums for Red Sea transits. Shippers weigh those costs against the longer route around the Cape of Good Hope, which adds roughly two weeks to Asia-bound voyages.
What Comes Next for the Crude Oil Price?
The crude oil price now depends on whether the Houthis can turn their territorial gains into sustained attacks on shipping. Brent has traded in a range of about $100 to $108 since July. It has risen on each strike on Saudi infrastructure and eased as flows recovered.
Three variables shape the next three to twelve months. The first is the pace of the East-West pipeline's return toward full capacity. The second is whether the front lines near Mokha and Bab el-Mandeb hold, with government forces and coalition air power contesting the coast. The third is the state of US-Iran diplomacy. Talks are under way, but Tehran has not accepted US nuclear demands. Houthi operations have tracked the wider conflict, and a settlement would remove their strategic rationale.
The structural effect is already visible. Saudi Arabia built the East-West pipeline as a hedge against Hormuz. Houthi forces on the Red Sea coast mean the hedge itself is now contested. Buyers in Asia and Europe will price in a persistent risk premium for Gulf crude, and importers will have to rely more on stockpiles and non-Gulf supply.
Outlook
Houthi control of Mokha and Perim has turned the Red Sea from a bypass into a second front. Saudi export capacity has partly recovered, but it remains below its design level and within reach of Houthi weapons. Brent near $103 reflects a market that has priced in disruption without a full closure of Bab el-Mandeb. A sustained attack on tanker traffic would remove that cushion, while a durable US-Iran settlement would ease pressure on both routes.
Mentioned tickers: 2222.SR
