Iran Threatens Red Sea Chokepoint That Has Kept Oil Prices in Check
Iran’s military has threatened to shut down a critical Red Sea shipping lane that has quietly become a vital pressure release for global oil supply, CNBC reported Friday.
A Chokepoint Under the Spotlight
The Bab el-Mandeb Strait connects the Red Sea to the Gulf of Aden. It sits at the southern tip of the Arabian Peninsula. Since the Iran war disrupted Strait of Hormuz traffic, it has become indispensable to global energy flows.
Saudi Arabia rerouted crude through its East-West Pipeline after Hormuz closures began. That oil now exits via the Red Sea and transits the Bab el-Mandeb toward Asian buyers. Throughput nearly doubled to 7.2 million barrels per day in April, up from 3.9 million bpd in February, according to commodity data firm Kpler.
Iran’s Revolutionary Guard threatened Monday to seal the strait unless Israel halted its military operations in Gaza and Lebanon. U.S. crude spiked 8% at its session high following the announcement before partially recovering.
What Escalation Would Mean for Supply
Matt Smith, director of commodity research at Kpler, told CNBC the Bab el-Mandeb has been a meaningful brake on oil price acceleration. Losing those flows would represent a significant step up in both geopolitical and market impact.
Iran’s Houthi allies in Yemen remain the most likely instrument for such a disruption. The group waged an extended Red Sea shipping campaign from 2023 through 2025, choking traffic through the strait before a ceasefire halted attacks. Smith noted that targeted strikes on a handful of tankers could be enough to deter the bulk of passage through the waterway without attacking every vessel.
Also Read: Oil Prices and the Strait of Hormuz: What Traders Are Watching
Background: The Houthis and the Red Sea
The Trump administration launched a 52-day air campaign against Houthi forces ending in May 2025. Washington agreed to halt strikes in exchange for a halt to attacks on U.S.-flagged vessels. That ceasefire largely held, allowing Red Sea flows to rebuild.
Jack Kennedy, head of Middle East country risk at S&P Global Market Intelligence, said the Houthis appear to be standing by until Tehran signals it is strategically advantageous to open a second front. That calculation could change quickly if U.S. military action against Iran intensifies.
Also Read: S&P Global’s Dan Yergin on Iran War Oil Supply Impacts
Ceasefire Uncertainty Clouds the Picture
A short-lived glimmer of relief emerged midweek when Israel and Lebanon announced a ceasefire agreement. But Hezbollah rejected the deal by Thursday. Israeli Prime Minister Benjamin Netanyahu told CNBC that disarming Hezbollah and demilitarizing Lebanon remain nonnegotiable conditions. With that fragile truce already in doubt, analysts warn the Bab el-Mandeb risk has not receded.
