Yemeni Houthis officially entered the war on March 28 and announced its first operation, firing two ballistic missiles against "Israeli military targets."

Yahya Saree, spokesperson for the Yemeni Armed Forces - the Houthi faction of Yemen's military - says the group carried out "a barrage of cruise missiles and drones" targeting "several vital military sites" belonging to Israel.

The spokesman said the strike was synchronized with ongoing Iran and Hezbollah operations and vowed to continue in the coming days “until aggression ends in all Resistance fronts.”

The Israeli military said it identified the launch of a missile from Yemen and “intercepted the threat.”

The entry of the Houthis, a close Iranian ally, raises the fears that they will shut down oil transport through the Red Sea and escalate the unfolding Gulf war related oil shock to a new level by closing the strait of Bab al-Mandab that is the gateway to the Red Sea of traffic.

Closing the second crucial chokepoint in the region will completely blockade all oil exports from the Gulf region and break the shortest transport link between Europe and Asia.

While the Houthis have not given any indication they would attack tankers going through the Red Sea, they have in the past. Houthi rebels attacked more than 100 merchant vessels with missiles and drones, sinking two vessels, between November 2023 and January 2025, saying that it was acting in solidarity with Palestinians in Gaza during the Israel-Hamas war. The rebels have been well armed by Tehran and control the strait that controls access to the route that leads to the Suez canal and connects Europe with Asia.

One immediate consequence of closing the Red Sea would be to prevent the American flagship USS Geral R Ford from returning to the Gulf, as it has just arrived in the Croatia for repairs after a fire, after sailing to the Mediterranean via the Red Sea.

Analysts say that the Islamic Republic has held the option of activating Houthis in reserves as a “nuclear option” as closing traffic through the Red Sea down in addition to the Strait of Hormuz would multiply the shock to the global economy several fold.

The link starts in the Mediterranean and the Suez Canal, and ends with the Bab al-Mandab straits that leads into the Indian Oceans and on to Asia.

Approximately 12% of global trade passes through the Red Sea, including 30% of container ship traffic and substantial volumes of oil and liquefied natural gas shipments that complement flows through the Strait of Hormuz.

Saudi’s only export pipeline under threat

If the Houthis block Bab al-Mandab, the crisis will go to a whole new level. The Strait of Hormuz is closed cutting off the exit for 20mn b/d of oil that used to flow through the Strait, however, approximately 10mn b/d is still leaving the Persian Gulf for international markets.

Iranian oil exports have been sailing through the strait unhindered since the start of the conflict carrying around 1.5mn b/d. The permits-for-passage transit system that the IRGC oversees is seeing an increasing number of tankers from other countries pass, including China, India and Bangladesh, adding around 0.5mn b/d.

The UAE has also been piping some 1.9mn b/d to its port Khor Fakkan on the Gulf of Oman that bypasses the blockage. The port has been attacked twice by Iran, but the Emirati operating company ADNOC has managed to boost flows to the port and keep exports flowing.

However, the most important exit route is Saudi Arabia’s crucial westward pipelines that terminate at the port of Yanbu on the Red Sea. Built exactly for the possible closure of the Strait of Hormuz, the pipeline has been ramped up to its maximum capacity of 7mn barrels a day, Bloomberg reports, up from the 4.4mn b/d it is estimated to have carried in the first two weeks of the conflict.

The Saudi exports act as a significant cushion to the stoppage of oil flowing out of the Gulf, which is what makes the Houthi’s entrance into the conflict so worrying for traders. Flotillas of tankers have been redirected to the Red Sea port of Yanbu to collect the oil, providing an important lifeline for global supply.

Crude exports via Yanbu have now reached about 5mn barrels a day and the kingdom is also exporting 700,000 to 900,000 barrels a day of refined products, Bloomberg reported citing sources in the Saudi oil industry. Of the 7mn barrels a day that go through the pipeline, 2mn are destined for Saudi refineries.

The Houthis have controlled Yemen’s capital, Sanaa, since 2014. Saudi Arabia launched a war against the Houthis on behalf of Yemen’s exiled government in 2015, and they now have an uneasy ceasefire.