Houthi Seizure of Perim and Saudi Pipeline Attack Disrupt Oil Flows

Yemen’s Iran-aligned Houthis have taken control of the island of Perim in the Bab el-Mandeb Strait, according to four Yemeni government sources. This move secures a vital chokepoint for global shipping, effectively narrowing the available corridors for oil transport. Simultaneously, Saudi Arabia temporarily halted operations on its East-West oil pipeline following a drone attack originating from Iraq. The combination of these disruptions places immediate pressure on Gulf oil flows, a development that complicates diplomatic efforts to de-escalate the regional conflict.

The strategic impact of controlling Bab el-Mandeb is significant for global energy markets. Located on the opposite side of the Arabian Peninsula from the Strait of Hormuz, this strait serves as a secondary major corridor for crude exports. If the Houthis maintain their grip, Iran could leverage this position to reduce supply volumes through a second key route. Such a reduction would likely exacerbate existing price pressures, particularly as the Strait of Hormuz, which handles roughly one-fifth of global oil and LNG trade, remains effectively closed due to earlier strikes.

Saudi Pipeline Disruption Impacts Supply

The 1,200-kilometer East-West pipeline is the primary alternative for Saudi crude to reach global markets while bypassing Hormuz. In recent months, this infrastructure has transported between four and five million barrels per day, representing four to five percent of global supply. State media reported that drone attacks in the Riyadh and Medina regions forced a temporary shutdown. Although the Saudi energy ministry did not detail the specific damage, the interruption directly reduces the volume of crude available for export during a period of heightened demand uncertainty.

Saudi officials stated that the drones came from Iraq, a country hosting Iranian-backed militias, though they have not attributed the attack to a specific group. The Saudi foreign ministry indicated that the kingdom has opted against immediate retaliation at the request of the Iraqi prime minister. However, Riyadh stated it reserves the right to take all necessary measures to protect its interests. This diplomatic hesitation contrasts with the physical disruption to logistics, creating a fragile environment for energy traders.

Market Reaction and Security Concerns

The International Energy Agency reported that Saudi crude supply has fallen to its lowest level in over three decades. This decline is partly attributed to Houthi-linked attacks on ships transiting Bab el-Mandeb. While oil prices dipped slightly on Friday after a previous surge, Brent futures remained elevated at approximately $105 per barrel. Traders are pricing in the potential for sustained supply shocks as the conflict widens.

Maritime security risks have intensified, with reports indicating at least 22 sailors have been killed since the war began in late February. Michelle Wiese Bockmann of Windward, a maritime intelligence firm, warned that these waters are no longer safe. Houthi spokesperson Yahya Saree claimed navigation remains safe for all vessels except Saudi ships, which are subject to a specific ban. This targeted threat increases insurance costs and operational risks for global shipping companies, further complicating supply chains.