New problem loading for oil mkt as Hormuz is shut
The oil market is now facing a second major choke point, following the severe disruption of the Strait of Hormuz. Iran-backed Houthi forces have taken control of Yemen's Red Sea port town of Mocha and are advancing towards Perim Island, located at the mouth of the Bab el-Mandeb Strait. This position puts them in a prime location to threaten a route that has become crucial for Saudi Arabia since the Hormuz chokepoint was largely closed.
Brent crude briefly reached $107 a barrel this week, and US diesel prices crossed $6 a gallon for the first time. The immediate threat is not a complete shutdown of shipping through Bab el-Mandeb, but rather the potential for the route to become too risky for commercial operators at a time when Gulf producers desperately need it.
This would leave the already strained global oil system with fewer options for moving crude from the Middle East to Europe and beyond.
Written by urgent.news from The Economic Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
