Houthi Red Sea Threat Raises Risk of New Oil Shock for Africa

A fresh threat by Yemen’s Houthi movement to impose a naval blockade on Saudi Arabia has heightened fears of another surge in global oil prices after Saudi crude tankers headed for Asia turned back in the Red Sea, raising concerns over disruptions to one of the world’s busiest energy corridors.

The Iran-aligned Houthis, who control much of northern and western Yemen, including the coastline overlooking the Bab el-Mandeb Strait, said they would target Saudi-linked shipping, prompting crude carriers bound for Asian markets to alter their routes rather than risk sailing through the strategic waterway.

The move has renewed concerns over the security of the Bab el-Mandeb Strait, a vital gateway connecting the Red Sea to the Gulf of Aden through which millions of barrels of crude and petroleum products pass every day.

The latest disruption comes as the Strait of Hormuz, another critical artery for global oil exports, remains under pressure from heightened tensions in the Gulf, leaving two of the world’s most important maritime oil routes vulnerable to interruption.

Brent crude climbed to about $91 a barrel as traders assessed the growing risk of supply disruptions from the Middle East, with markets increasingly concerned that prolonged insecurity could tighten global supplies.

For Africa, the developments threaten to deepen economic strains in countries that rely heavily on imported fuel from the Middle East.

“Any sustained disruption along the Red Sea or the Strait of Hormuz would likely increase freight costs, shipping insurance premiums and crude prices, eventually feeding into higher pump prices, transport costs and inflation,” said Anthony Mwangi, a Nairobi a Mombasa based logistics expert.

The Bab el-Mandeb and the Strait of Hormuz together form the backbone of oil shipments between the Middle East, Europe and Asia. Any interruption along either corridor forces vessels to take longer routes, delaying deliveries and increasing transportation costs that are ultimately passed on to consumers.

East African economies such as Kenya, Tanzania, Uganda and Rwanda, alongside several countries in West and Southern Africa, are particularly exposed because they import most of their refined petroleum products and crude from international markets.

Higher fuel prices would raise the cost of moving goods and food across the continent, adding pressure on governments already grappling with inflation, weakening currencies and rising debt burdens.

news@businessdayafrica.org

Edited by Gerald Wechuli