US-Iran war: As conflict widens, more waterways become unsafe for oil exports, raising fears of energy crisis

The ongoing US-Iran war has reached its seventh month, deepening regional tensions and threatening global energy markets. Once crucial waterways for oil exports are now deemed unsafe, raising fears of a looming energy crisis. The conflict, which erupted in late February following a joint US-Israeli operation against Iran, has escalated into a wider regional confrontation.

Iran retaliates against US attacks by striking Washington's regional bases, while Saudi Arabia and Houthi rebels backed by Iran have also joined the hostilities.

The Red Sea, a vital shipping route for Persian Gulf crude, is now threatened by the Houthis' expansion of control. This development has left limited alternatives for transporting oil, with shipping traffic through the Strait of Hormuz, typically a primary oil transit point, remaining significantly restricted. Saudi Arabia, the Middle East's leading oil producer, recorded its lowest oil exports last month in over a decade, underscoring the strain on global energy supplies.

The US Navy has been forced to undertake perilous operations to transit oil through the Strait of Hormuz, a contentious point in US-Iranian negotiations. In July and August alone, at least 23 ships were attacked in the strait near Oman, resulting in the deaths of 22 sailors. Tehran initially closed the Strait of Hormuz following attacks, prompting the Bab al-Mandab Strait to become an alternative route. However, the Houthis now control this route, having seized the Red Sea port city of Mokha in Yemen.

Analysts warn that the escalating conflict, with no end in sight, could spiral into a broader military confrontation, plunging the Middle East into its worst energy supply disruption in decades. As key oil routes face threats, the region grapples with mounting instability. The Mediterranean route, though cheaper but longer, poses challenges for Saudi Arabia's oil shipments to Asia.

The region's energy crisis deepens as alternative corridors prove costly and difficult to navigate, with only two Saudi cargoes successfully passing through the Bab al-Mandab Strait last week, according to Kpler data.