Yemen has threatened to close the Bab al-Mandeb Strait, a critical global shipping chokepoint, if Saudi Arabia continues its military strikes. The warning from the Iran-backed Houthi rebels signals a major escalation in the regional conflict. They claim such a move could push oil prices to $200 a barrel. The strait handles roughly 20% of the world's oil shipments.
Saudi Arabia has already responded by suspending its own oil exports through the waterway. The Kingdom is reinforcing its military presence there with U.S. support. This direct threat has sharply increased market risk perception.
The probability of the strait's closure, as priced by financial markets, has surged. It now stands at 18.5%, up from just 8% a week ago. This jump reflects growing investor anxiety over a potential major disruption to global oil supply.
Key factors to monitor include actions by Houthi forces, Iran's IRGC, and the U.S. Navy. Any military incidents or further diplomatic escalation will directly influence market expectations and global energy prices.