Houthi Red Sea Attack Would Add $20 To Price Of Oil, JPMorgan Calculates

Over the weekend, Yemen’s Houthi rebels formally joined the escalating Middle East conflict, siding with Iran and launching missile strikes on Israel. While their involvement is not yet decisive, it introduces a second maritime pressure point in the Red Sea, alongside the Strait of Hormuz, which has the potential to send oil prices sharply higher. 

The immediate implication is geographic: as JPMorgan's Natasha Kaneva writes overnight, the conflict is no longer concentrated in the Persian Gulf and around the Strait of Hormuz, but now extends into the Red Sea and the Bab el-Mandeb—one of the world’s most crucial chokepoints for crude and refined product flows. In effect, two major corridors of global energy trade are exposed simultaneously, narrowing rerouting options and increasing system-wide supply-chain risk.