Middle East Energy Corridors Pinch Shut, Deepening
Global Oil Supply Crisis
Ship operators already faced severe
risks in navigating the region, and now the danger is higher as Houthi militias
assert control in the Red Sea.
·
Red Sea route under threat:
Iran-backed Houthi militants expanded control over the Red Sea on 11
September 2026, threatening a key alternative route for Persian Gulf crude.
·
Hormuz traffic remains severely depressed: Only 19
vessels per day on average crossed the Strait of Hormuz in September,
versus about 130 vessels daily before the war.
·
Lowest recent Hormuz traffic: Just 9
ships crossed the Strait on Thursday, according to Kpler.
·
Saudi oil exports plunge: Saudi
Arabia’s oil exports in August fell to their lowest level in at least 13
years.
·
Gulf oil exports sharply reduced: Crude
exports from Gulf countries excluding Iran were only about two-thirds of
prewar levels in August.
·
Major shipping casualties: At least
23 ships were hit near Oman in July and August, while at least 22
sailors have been killed in the Middle East since the war began on 28
February 2026.
·
Oil prices surge: Crude
oil briefly crossed $108 per barrel on 11 September, around 50% above
prewar levels.
·
U.S. fuel prices rise: Average
U.S. gasoline prices exceeded $4/gallon, while diesel crossed $6/gallon,
increasing transportation and industrial costs.
·
Saudi alternative pipeline attacked: Saudi
Arabia’s East-West Pipeline, being used to bypass Hormuz, was targeted
repeatedly and shut down as a precaution.
·
Houthi capture of Mokha: Houthi
forces seized the strategic Mokha port city
in Yemen, described by analysts as a potential “game changer.”
·
Bab al-Mandab becomes another chokepoint: The
Houthis now have significant leverage over Bab al-Mandab, the southern
entrance to the Red Sea and an important alternative route for Gulf oil.
·
Saudi shipments collapse: Only two
Saudi cargoes passed through Bab al-Mandab in the previous week.
·
Alternative route to Asia is costly: Saudi
Arabia can send oil north through a pipeline toward the Suez Canal and
Mediterranean, but this option is more expensive and can add weeks to
shipments to Asian customers.
·
U.S. naval protection faces growing risks: U.S.
forces have kept some oil moving through routes close to Oman, but the
operation has become increasingly dangerous.
·
Iranian tankers targeted: At least
eight Iranian tankers were reportedly disabled or destroyed by U.S.
forces in the past week, followed by Iranian retaliation against vessels near
Oman.
·
U.S. policy options narrowing: Analysts
say the Trump administration has fewer remaining options to contain oil prices
or end the conflict.
·
Sanctions have not achieved their objective: New U.S.
sanctions on Tehran imposed last month have failed to bring the expected
pressure to end or destabilize the Iranian regime.
·
Iran demands concessions: Iran is
seeking an end to the U.S. naval blockade of its ports and the release of
frozen overseas assets, while insisting on maintaining control of Hormuz.
·
War approaching seventh month: With no
clear diplomatic settlement, the conflict is increasingly disrupting the Middle
East—the world’s key energy-producing region.
·
Global economic impact: The
simultaneous disruption of Strait of Hormuz, Bab al-Mandab and Saudi
Arabia’s East-West Pipeline threatens crude supplies, shipping, fuel
prices, inflation and global trade.
The
world’s most valuable energy corridors are pinching shut.
On
Friday (11.09.2026), Houthi militants backed by Iran expanded their control of
the Red Sea, threatening a critical route for Persian Gulf crude. That left the
region with few alternatives, since shipping traffic through the Strait of
Hormuz — once the world’s primary oil transit point — remains significantly
constrained and far below what it was before the war.
And
oil exports from Saudi Arabia, long the most important producer in the Middle
East, plunged last month to their lowest point in at least 13 years.
The
U.S. Navy has been able to keep oil flowing out of the Strait of Hormuz on sea
paths close to the coast of Oman, the opposite side from Iran. But that has
required an extensive and dangerous operation.
For
shipping companies, the once routine operation of navigating the strait has
become a high-risk endeavor. At least 23 ships were
hit in the waterway near Oman in July and August. Since the war began at the
end of February, at least 22 sailors have been killed in the Middle East.
“These
waters aren’t safe,” said Michelle Wiese Bockmann, an analyst at Windward, a
maritime intelligence company.
As
the war in Iran nears its seventh month, it appears to be spinning out of
control, analysts said. With no diplomatic end in sight, the Middle East, the epicenter of energy production, is facing its most severe
supply crisis in decades.
The
Trump administration “has been using a variety of tools very effectively to
keep the oil price and the gasoline price at bay,” said Amos Hochstein, who
served as a foreign affairs and energy adviser in the Biden administration. But
now, he said, fewer options are available to President Trump and his team.
“They’re “stuck.”
The
economic consequences are piling up.
Oil
prices on Friday briefly topped $108 per barrel after escalating attacks from
the Iranian-backed Houthi militia. That is roughly 50 percent above prewar
levels. Average U.S. gasoline prices have climbed above $4 a gallon — over $1
more than they were a year ago. Also on Friday, the average cost of diesel, a
staple fuel for trucking, farming and industry, topped $6 a gallon in the
United States.
Mr.
Trump said this week that he believed the war in Iran would not end until after
the U.S. midterm election in November, but claimed gas prices would come
“tumbling down” after the voting. In truth, analysts said, the Trump
administration has few options left for ending the war or lowering energy
prices. Last month, administration officials imposed tight new economic
sanctions on Tehran in the hope the move would topple the regime, but it has
not.
“They
could bomb, or they could talk,” said Gregory Brew, an analyst at the Eurasia
Group, a research firm.
Iran
has demanded, among other things, the end of a U.S. naval blockade of Iranian
ports and the release of frozen assets overseas. Iran has also continually
claimed it will maintain control over the Strait of Hormuz.
“There
may be a clear way out, which would be surrender to Iran,” said Elliott Abrams,
a senior fellow at the Council on Foreign Relations who served as a special
representative for Iran and Venezuela during the first Trump administration.
But, he added, “the question to the president would be: Are you willing to
grant that to get past the election?”
On
Friday, Houthi rebel groups gained control of the strategic Red Sea port city
of Mokha in Yemen, pushing out forces allied with the
Yemeni government, which is backed by Saudi Arabia. Just days earlier, the
Houthis injured 73 civilians and hit energy facilities in the southern part of
Saudi Arabia.
Fawaz
A. Gerges, a London School of Economics professor focusing on the Middle East,
called the Houthi control of Mokha “a game changer”
for the militant group as well as for Iran.
The
Saudi Energy Ministry said on Friday that its East-West Pipeline, the conduit
it had been using instead of the Strait of Hormuz, had been “targeted multiple
times” by attacks the day before and had been shut down as a “precautionary
measure.”
After
the first U.S. and Israeli strikes on Iran on Feb. 28, Tehran restricted access
though the Strait of Hormuz. That turned the Bab
al-Mandab Strait, at the south entry to the Red Sea, into a backup route for
Middle East oil, particularly for Saudi Arabia. Now the Houthis have a
stranglehold there.
“This
new development gives the Houthis important leverage with Saudi Arabia, their
staunch enemy, and also the global trade system,” Mr. Gerges said. He added,
“As a result, Iran is in a stronger position now to increase the pain to the
U.S. economy and the world.”
In
the past week, only two Saudi Arabian cargoes passed through the Bab al-Mandab
Strait out of the Red Sea, according to Kpler, a maritime data firm.
Saudi
Arabia has another Red Sea option to export oil — sending it north though a
pipeline near the Suez Canal. But that route through the Mediterranean is
costlier and adds weeks to the voyage to Asia, where most of the kingdom’s
customers are.
Traffic
through the Strait of Hormuz is a small fraction of the 130 or so vessels a day
before the war, according to ship-tracking companies. An average of 19 ships
per day have transited the strait in September, down from 20 in August and a
high of 34 in June, when a memorandum of understanding between the United
States and Iran was briefly in place.
Kpler recorded just nine ships as having
passed through the strait on Thursday.
Ms.
Wiese Bockmann, the analyst at Windward, calculated that crude oil exports from
Gulf countries, aside from Iran, in August was about two-thirds of what it was
before the war.
Just
in the past week, U.S. forces have disabled or destroyed at least eight Iranian
tankers, she said, and Iran has retaliated with deadly attacks against vessels
passing through the strait near Oman. The intensifying attacks are causing
shipowners, even ones with a high appetite for risk, to hold off on braving the
region.