Middle East oil exports excluding Iran rose above pre-war levels in September, yet Brent crude, the international benchmark, hovered around $100 a barrel on Monday.
Much of the increase came from producers using alternative routes through the Red Sea. Houthi attacks threaten crude shipments on that route.
The Houthis control much of Yemen’s Red Sea coast. The Bab al-Mandab Strait, on the other side of the Arabian Peninsula from the Strait of Hormuz, is among the world’s busiest shipping lanes.
The group’s offensive has reached the strategic island of Perim in the strait, four Yemeni government sources told Reuters on Friday. Yemen’s Saudi-backed government and Iran’s Houthi allies have battled for control of the Bab el-Mandeb Strait.
Over the past four months, the Houthis have launched dozens of missile and drone strikes on shipping. Attacks by the Iran-backed group set Saudi energy facilities ablaze this week.
The Red Sea has been a key alternative to the Strait of Hormuz for crude shipments, and the attacks threaten that trade. The Houthis began directing fire at Israel and Red Sea shipping after Hamas’s attack on Israel on 7 October 2023 triggered the war in Gaza.
The group says it is acting in solidarity with Palestinians in Gaza. The United States leads an international coalition intended to protect Red Sea shipping and has struck Houthi targets in Yemen since mid-January.
Brent futures moved above $100 a barrel on Wednesday for the first time since 24 July. By 1210 GMT on 9 September, they were up $2.88, or 2.94%, at $100.80 a barrel.
The dated Brent benchmark, used to price roughly two-thirds of supply, has remained above $100 per barrel since 3 September. Since the Iran war began on 28 February, Brent has climbed as high as $126.41 a barrel, reached on 30 April.
Ole Hansen, head of commodity strategy at Saxo Bank, said: ‘The move towards and back above $100 Brent is reflecting a market that increasingly has to change its view on how long the Middle East crisis will continue to curb supply from the region’.
Hamad Hussain, senior climate and commodities economist at Capital Economics, said the central risk was whether recent tanker attacks would mean fewer ship-to-ship transfers in the Gulf of Oman.
The result is a market weighing increased crude availability against the risk and cost of moving it through contested waters. Oil buyers and consumers face higher prices despite the additional supply, as Houthi military control creates a supply-risk premium around Brent.
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