A second chokepoint closes on Asia's crude supply

Houthi action at Bab al-Mandab shuts the workaround Asian importers built after Hormuz, leaving Suez the only route fully open.

Yemen's Houthis have blockaded Saudi shipping through the Bab al-Mandab strait at the southern mouth of the Red Sea, leaving the Suez canal as the only chokepoint fully open to Gulf oil. It lands on importers already strained: Japan, South Korea, Thailand and the Philippines take up to 90% of their oil from the Middle East, and have been competing for scarce crude since Iran effectively closed the strait of Hormuz in March.

The blockade shuts the workaround. After Hormuz, Saudi Arabia moved exports to Yanbu on its Red Sea coast, which now handles more than 70% of the kingdom's crude shipments. Rerouting north through Suez means part-unloading the largest tankers into Egypt's Sumed pipeline and reloading them in the Mediterranean; going around the Cape more than doubles the voyage. War-risk premiums have reportedly doubled in a week, and traffic through Bab al-Mandab has fallen to its lowest in months after at least two Saudi tankers were targeted.

This is scarcity manufactured by geography. Fuel gets dearer across importing Asia, subsidies eat into government budgets, import costs push inflation up, and the substitutions run backwards — coal plants restarted after March, Japan and South Korea buying Russian oil for the first time since 2022, Chinese refiners taking more sanctioned barrels.

Watch the reserve building underway in India, the Philippines and South Korea, and whether the renewables urgency the crisis created outlasts it. The reporting rests on shipping behaviour and analyst readings rather than settled price data.

Source: Google News