The latest
Concerns are growing in energy markets that regional tensions could spill over into the Bab al-Mandab Strait, one of the world’s most important maritime chokepoints. The route has become increasingly important for Gulf oil exports as shipping through the Strait of Hormuz faces growing uncertainty.
Details
• Bab al-Mandab connects the Red Sea to the Gulf of Aden and the Arabian Sea, serving as a key gateway for trade and energy shipments between Asia and Europe.
• Saudi Arabia has increased its use of the East-West Pipeline to move crude to Red Sea ports, allowing exports to continue toward Asian markets through Bab al-Mandab.
• According to Kpler data, oil and petroleum product flows through the strait rose to about 7.2 million barrels per day in April, up from 3.9 million barrels per day in February.
• Market concerns intensified after Iran’s Islamic Revolutionary Guard Corps threatened to close or target the waterway if Israeli military operations in the region continued.
• Oil prices briefly surged following the threats before easing on signs of a temporary reduction in tensions.
• Uncertainty remains high, however, as ceasefire arrangements across parts of the region remain fragile and the risk of renewed escalation persists.
• Traders are also watching Yemen’s Houthi movement, which previously targeted commercial shipping in the Red Sea, causing a sharp decline in traffic through Bab al-Mandab that has yet to fully recover.
What to watch
Any new military escalation involving Iran, the United States, or Israel could place Bab al-Mandab at the center of the crisis, threatening a key global energy corridor and adding further pressure to oil markets and shipping costs.
