Iran Threatens Second Chokepoint as Houthis Warn of $200 Oil if Bab el-Mandeb Closes

Oil's geopolitical risk premium remained elevated on Wednesday after Iran's Islamic Revolutionary Guard Corps (IRGC) threatened to close "all other export corridors that benefit the U.S. and its allies," raising concerns that Yemen's Houthi movement could attempt to disrupt traffic through the Bab el-Mandeb Strait—a key maritime chokepoint separate from the Strait of Hormuz. Brent crude traded near $85.35 per barrel, marking its highest closing level since June 12 for a second consecutive session, while WTI remained near its highest level since June 15.

Why Bab el-Mandeb matters

The Bab el-Mandeb Strait connects the Red Sea with the Gulf of Aden and serves as an important route for Saudi oil exports and global maritime trade. A senior Houthi official said on Monday that the group could close the waterway if Saudi Arabia continues military operations in Yemen, claiming such a move could push oil prices toward $200 per barrel. This represents a statement from a Houthi official rather than an independent market forecast, and there is currently no confirmation that such a closure is imminent.

Latest developments

According to Iranian state media, the IRGC claimed to have targeted U.S. military-related facilities in Bahrain, Kuwait and Jordan. Kuwait reported that a fire at a targeted site had been contained, while Jordan said its air defenses intercepted three Iranian ballistic missiles that entered its airspace. These claims have not been independently verified.

Meanwhile, U.S. Central Command said its forces conducted a seven-hour operation on Tuesday targeting military sites near the Strait of Hormuz and along Iran's coastline, stating the strikes were intended to reduce Iran's capability to threaten commercial shipping. U.S. officials also said Iran has attacked seven commercial vessels over the past week, resulting in multiple crew casualties.

Market focus

Investors are also monitoring diplomatic developments after President Donald Trump warned of potential additional U.S. strikes if negotiations with Iran do not resume. Market participants continue to assess whether tensions could disrupt regional energy exports.

For traders, any confirmed disruption to shipping through Bab el-Mandeb would likely have broader implications than current risks around Hormuz, potentially affecting Saudi export routes and increasing shipping costs. However, the $200 oil scenario remains a hypothetical outcome based on public statements rather than a market consensus or confirmed forecast.