Iran's proxies using Yemen to compound war's impact on oil prices
Summary
Fighting between Yemen’s Iran-backed Houthi rebels and Saudi Arabia, along with attacks by other Iranian proxy groups on Saudi oil infrastructure, is disrupting oil shipping routes in the Middle East. These conflicts are raising global oil prices by threatening tanker traffic through key waterways like the Strait of Hormuz and the Bab el-Mandeb Strait.Key Facts
- The conflict involves Yemeni Houthi rebels supported by Iran and Saudi Arabia.
- Iran-backed groups have attacked Saudi oil pipelines and infrastructure.
- The Strait of Hormuz and Bab el-Mandeb Strait are vital chokepoints for about 30% of the world’s oil supply.
- A recent drone attack damaged Saudi Arabia’s East-West pipeline, which connects the Persian Gulf to the Red Sea.
- This pipeline attack has reduced Saudi oil exports and tightened global oil supply.
- Brent crude oil price recently hit about $108 per barrel, up from $67 before the conflict began.
- Saudi Arabia’s oil output dropped to under 6 million barrels per day in August, below its target.
- The pipeline damage could take 3-5 weeks to repair and could remove 4% of global oil supply if disrupted long-term.
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