Yemen's Houthis reach strategic island at mouth of vital shipping lane

On September 11, Iran-aligned Yemeni rebels known as Houthis seized the strategic island of Perim in the Bab el-Mandeb Strait, according to Yemeni government sources. This move could potentially tighten their control over one of the world's vital shipping routes, raising concerns about the impact on global oil markets. Meanwhile, the internationally recognised Yemeni government forces withdrew from Perim and also captured the mainland Red Sea coastal town of Dhubab.

If the Houthis gain full control of the Bab el-Mandeb Strait, it could give Iran a critical edge in the conflict with the US, reducing supplies through a key transit corridor and potentially driving up oil prices. Saudi Arabia, the world's largest oil exporter, has long relied on the Red Sea route as an alternative to the Iran-adjacent Hormuz Strait, which has been effectively closed due to the Iran conflict.

While oil prices were expected to end the week above US$100 a barrel, they slightly declined on Friday after reports suggested Middle Eastern foreign ministers were attempting to arrange a temporary deal to manage shipping through the Strait of Hormuz.