Houthi forces are expanding their reach across Yemen's western coastline, seizing strategic locations like Perim Island near the Bab al-Mandab Strait. This maritime advance, combined with Iranian influence over the Strait of Hormuz,threatens to destabilize global energy and food supply chains.
The Houthi seizure of Perim Island and Mokha
Houthi forces are consolidating power along Yemen's western coast to control vital maritime passages. By seizing the port of Mokha and moving toward Dhubab and Perim Island, the group has gained a foothold near the Bab al-Mandab Strait. This location is critical for shipping between the Indian Ocean and the Red Sea, serving as a primary artery for goods moving between Asia, Africa, and Europe.
The control of Mokha is particularly significant given its historical importance in the global coffee trade. By securing these coastal points, the Houthis have positioned themselves to exert direct pressre on one of the world's most sensitive shipping corridors. This move increases the risk of widespread disruption to the flow of oil, gas, and consumer goods.
A crippled 750-mile lifeline for Saudi oil
The disruption of the Strait of Hormuz has already slashed oil transit to potentially one-third of its former levels. According to the report, Iran's control over this passage has removed a massive portion of global liquefied natural gas shipments, which previously accounted for one-fifth of global trade. This scarcity has forced a heavy reliance on the Saudi East-West pipeline, a 750-mile contingency route.
This pipeline, originally built in the 1980s during the Iran-Iraq war, was intended to serve as a safety valve for the kingdom's oil exports. However, recent drone attacks, allegedly launched by Iraqi Shia militia groups, have targeted the pipeline's pumping stations. As the report notes, these strikes forced a six-week closure of a line that has a daily capacity of 7 million barrels, removing a critical alternative to the Hormuz passage at a moment of extreme market strain.
Brent crude's climb toward $110 per barrel
Saudi Aramco has reportedly warned European refineries that it will suspend deliveries for the upcoming month. This move is driving up the costs of refined products, including petrol, diesel, and jet fuel. The impact of these supply constraints was evidenced when benchmark Brent crude briefly climbed to nearly $110 per barrel, its highest level since May.
Rising transport costs are expected to create a ripple effect throughout the global economy.. As fuel prices climb, the increased cost of logistics is likely to feed directly into higher food prices, household energy bills, and general inflation. This creates a dangerous economic outlook for businesses and households as winter approaches.
The limits of 1,000 American airstrikes
A massive American-led bombing campaign involving 1,000 airstrikes failed to significantly weaken Houthi control in 2025. Despite requests for more military assistance from Saudi Crown Prince Mohammed bin Salman, President Donald Trump has not provided the level of support Riyadh seeks. The Houthis maintain control over large areas of northern Yemen, including the city of Sanaa, proving difficult to dislodge despite 50 days of intense operations.
The intersection of Russian diesel shortages and Ukrainian grain
The global energy crisis is being compounded by the ongoing conflict between Russia and Ukraine. Ukrainian drones have reportedly struck one-third of Russia's diesel refining capacity, forcing Moscow to import fuel from India. This adds further volatility to global fuel markets at a time when energy supplies are already under pressure.
Russia has responded to these strikes by targeting Ukrainian grain infrastructure and threatening exports moving through the Black Sea. Because Ukraine is a major global agricultural producer, these disruptions raise the specter of a food price surge. A critical question remains: can the global market absorb these simultaneous shocks to fuel and food, or are we facing an inevitable period of hyper-inflation?
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