Yemen's Houthi rebels have seized the strategic Red Sea islands of Greater and Lesser Hanish, strengthening the Iran-backed group's control over a key shipping route. This development comes as concerns grow about a potential new global oil supply crisis.
The capture of the Hanish islands follows the militant group's recent advance along Yemen's Red Sea coast, including the port of Mokha and Perim island in the Bab al-Mandab strait. These islands are located 160km north of the strait, a critical chokepoint connecting the Red Sea to the open ocean and vital for Saudi Arabia's Asian markets.
On Monday, experts warned that the closure of Saudi Arabia's east-west pipeline, which moves oil from the Strait of Hormuz to the Red Sea export hub of Yanbu, will further strain global oil supplies. Officials estimate repairs could take weeks. Rystad Energy noted that an average of 2.6m to 4m barrels of oil per day, previously moved through this pipeline and out of Yanbu, are now at risk of disappearing from the market.
Brent crude oil increased by 1.17% to $106.92 a barrel on Tuesday morning. The average price of diesel in the US reached $6 per gallon last week for the first time, due to the Iran war and Ukrainian attacks on Russian refineries. Chevron CEO Mike Wirth stated on Friday that existing stock buffers have largely disappeared, making it "harder to envision a scenario where prices soften and quickly."