Impact on oil prices if Bab al-Mandeb closes
The article examines the impact of the potential closure of the Bab al-Mandab Strait on global oil prices, especially amidst the tensions between Yemen and the Houthis. It explains that Bab al-Mandab is a strategic transit route for energy transportation, and any disruption there could lead to a reduction in available oil supplies and an increase in costs, driving up prices and affecting the global market—particularly if it coincides with disturbances in the Strait of Hormuz. The article forecasts that market equilibrium could take between six months to a year to restore, with oil prices potentially rising to between $75 and $80 per barrel once supplies stabilize. It also highlights the importance of the Saudi oil pipeline through the Red Sea as an alternative to mitigate the impact of disruptions in maritime routes, amid concerns over ongoing production disruptions resulting from attacks on oil facilities, which could influence shipping costs and international logistics.
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