Yemen Escalation and Hormuz Attacks Threaten Vital Oil Shipping Routes

Economy 09:35 AM - 2026-10-05

Oil tankers.

Escalating fighting in Yemen and continuing attacks on commercial vessels around the Strait of Hormuz are putting renewed pressure on two of the Middle East’s most important maritime routes, raising concerns over the security and cost of global energy supplies.

The two flashpoints are geographically separate but closely connected to the international oil trade. The Bab al-Mandab Strait, at the southern entrance to the Red Sea, links the Red Sea with the Gulf of Aden, while the Strait of Hormuz connects the Persian Gulf with the Gulf of Oman.

Both are critical routes for the movement of energy and other commodities between the Middle East and global markets.

Yemen Offensive Threatens Key Red Sea Route

Yemen’s government announced on Sunday that it was launching a major military campaign to retake territory controlled by the Iran-aligned Houthi movement.

The announcement followed a rapid Houthi advance in recent weeks, including the capture of the strategic Bab al-Mandab Strait and around 150 kilometres of Red Sea coastline, according to Reuters. The Houthis have also advanced towards Taiz, threatening important routes linking the city with Aden.

The developments have heightened concerns over commercial shipping through the Bab al-Mandab, which has become increasingly important as an alternative route for energy shipments amid disruption around the Strait of Hormuz.

The Houthis have also claimed missile and drone attacks against Saudi targets, including oil facilities. Saudi Arabia has not confirmed the Houthi claims, according to Reuters.

Shipping Under Pressure Around Hormuz

Further east, the Strait of Hormuz remains another major security flashpoint.

Commercial shipping through the waterway slowed sharply over the weekend following a series of attacks on tankers. Kpler data showed that only five commodity vessels crossed the strait on Saturday, while none were recorded on Sunday, compared with 31 vessels during the previous weekend.

Reuters reported that at least seven incidents involving vessels had recently been recorded in and around the strait. One of the vessels, the very large crude carrier Kazimah III, was reportedly struck by an unidentified projectile on 1 October, causing a fire. All crew members were reported safe and subsequently evacuated.

The UK Maritime Trade Operations agency has also reported at least one attack a day in the Strait of Hormuz or Gulf of Aden since 2 October, according to Reuters.

Despite the attacks and the sharp decline in vessel traffic, the Strait of Hormuz has not been completely shut. Middle Eastern crude exports actually exceeded pre-war levels on four of the seven days during the final week of September, according to provisional Kpler data cited by Reuters.

Crude exports from the region reached between 19.5 million and 22.5 million barrels per day on several days, while the seven-day average stood at 18.5 million barrels per day on 1 October.

The Problem is Increasingly About Logistics

The disruption is therefore not simply a question of whether oil is available. An increasingly important issue is whether crude can be transported safely, reliably and economically.

Reuters reported on Monday that crude flows through Hormuz had reached 14.2 million barrels per day on a seven-day average on 26 September, almost 80% of pre-war levels. However, tanker rates, insurance costs and logistical complications have risen sharply.

Rates for transporting crude from the Middle East to Asia aboard very large crude carriers have recently exceeded $1.2 million per day, compared with roughly $30,000 in January, according to shipping broker Poten & Partners. Freight costs have consequently risen from around 3% to approximately 27% of the delivered cost of a barrel.

This helps explain why oil prices remain elevated even as more Middle Eastern crude reaches international markets.

Why the Two Flashpoints Matter Together

The developments in Yemen and around Hormuz are creating pressure on two strategic maritime corridors at the same time.

A prolonged disruption around Bab al-Mandab could affect shipments travelling between the Indian Ocean and the Red Sea, potentially forcing vessels to take longer routes around Africa. At the same time, instability around Hormuz directly affects Gulf oil and gas exports.

The combined effect is increasing the risks and costs facing shipping companies, insurers, oil producers and buyers.

For global markets, the immediate concern is therefore not necessarily a complete halt in oil production or exports. Instead, it is the possibility that continued attacks and insecurity will make the movement of energy supplies increasingly expensive and unpredictable.

Iraq Faces Direct Exposure

The situation is particularly important for Iraq because its southern crude exports are exposed to developments around the Strait of Hormuz.

Iraq’s state-owned Oil Tanker Company recently transported 2 million barrels of Iraqi crude through the strait aboard a very large crude carrier, demonstrating the country's direct exposure to the security situation surrounding the waterway.

Any sustained disruption could therefore affect not only global oil prices but also the cost, timing and reliability of Iraqi crude exports.

For now, oil continues to flow through the region, but the combination of renewed fighting in Yemen, attacks on commercial vessels and rising shipping and insurance costs has created a more fragile energy-trading environment.

The developments in Yemen, Bab al-Mandab and the Strait of Hormuz are consequently becoming part of the same broader concern for energy markets: how securely and efficiently can Middle Eastern oil reach global consumers while regional tensions remain high?


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