The Iran-backed Houthi movement's latest threat to block Israel-linked vessels from the Red Sea is emerging as a fresh risk to global energy markets at a time when oil flows are already under severe strain from the ongoing Iran-Israel conflict.
The announcement comes after the Houthis said they would prohibit ships linked to Israel from transiting the strategic waterway following Israel's renewed military strikes on Iran.
While the move is currently limited in scope, a Houthi source told Reuters it is only a first step, warning that the group could expand restrictions to all ships heading to Israel and potentially adopt additional measures if regional tensions continue to escalate.
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The threat carries outsized significance because the Strait of Hormuz, the world's most important oil chokepoint, has already been severely disrupted since Iranian action following U.S. and Israeli attacks on Feb. 28.
With Gulf energy exports constrained, Saudi Arabia has increasingly relied on its Red Sea outlet at Yanbu, diverting more than 70% of its usual crude shipments through the route.
That alternative corridor has helped prevent a deeper supply shock and kept a lid on oil prices. Any sustained disruption in the Red Sea, however, could remove one of the few remaining export routes available to Gulf producers.
Unlike the Houthi attacks that began in late 2023, when Gulf oil exports continued to flow through Hormuz and cargoes could simply be rerouted, energy shipments are now increasingly dependent on the Red Sea. Analysts warn that attacks on commercial shipping or port infrastructure could therefore have a far greater impact on global energy markets than previous disruptions.
The Houthis have demonstrated their ability to unsettle global trade before. Following the October 2023 Hamas attack on Israel and the subsequent war in Gaza, the group launched missile, drone and maritime attacks targeting vessels it said were linked to Israel.
The campaign forced major shipping companies, including Maersk and Hapag-Lloyd, to reroute vessels around Africa, significantly increasing costs and transit times.
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Although the Houthis are aligned with Iran's regional Axis of Resistance, their relationship with Tehran differs from that of groups such as Hezbollah and Iraqi Shi'ite militias. The movement maintains that its priorities are primarily domestic and rejects claims that it operates as a direct Iranian proxy, despite U.S. accusations that Iran has armed, funded and trained the group.
Notably, the Houthis have played only a limited role in the latest Iran-Israel conflict so far, carrying out a handful of missile and drone attacks on Israel. However, their leadership has repeatedly signalled readiness to escalate. Houthi leader Abdul Malik al-Houthi said on March 5: "Our fingers are on the trigger at any moment should developments warrant it."
For energy markets already grappling with disruptions in the Gulf, that warning is likely to resonate far beyond the Red Sea.
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