Asia ‘scraping the bottom of the barrel’ as Red Sea oil blockade worsens energy crisis

Asian economies are facing a worsening energy crisis due to the Houthi blockade of the Bab al-Mandab strait, a crucial Red Sea shipping route. This follows a previous disruption at the Strait of Hormuz. Countries like Japan, South Korea, the Philippines, and Thailand, heavily reliant on Middle Eastern oil, are scrambling to secure supplies. The blockade is forcing tankers to take longer, more expensive routes, such as through the Suez Canal with partial offloads or around Africa, significantly increasing costs and voyage times. This is exacerbating inflation and straining government budgets, as countries are already spending on fuel subsidies. Insurers have doubled war risk premiums, further adding to the expense that will likely be passed on to consumers.

Yemen's internationally recognized government, speaking in Riyadh, has warned that the Houthi movement aims to control shipping in the Red Sea's Bab al-Mandeb Strait, mirroring Iran's strategy in the Strait of Hormuz. According to Yemen's foreign minister-designate, Afrah al-Zouba, this ambition is emboldened by a perceived insufficient international response to Houthi activities. The Bab al-Mandeb Strait is a critical chokepoint for global trade, with approximately 30 percent of global container traffic passing through the Red Sea. Al-Zouba stated that Houthi control of this strait, along with Iran's control of Hormuz, would effectively shut down two major maritime gateways. This warning comes amid escalating tensions and recent Houthi declarations of a maritime siege on Red Sea shipping to and from Saudi Arabia.