In the immortal words of Douglas Adams: “Don’t panic.” (At least not yet.)
In less than a week, the Houthis have swept down Yemen’s Red Sea coast to Bab el-Mandeb. They took Mocha and Dhubab, directly opposite Perim Island; they also captured the Hanish Islands farther north. Houthi terrorists now occupy the Yemeni coast overlooking one of the world’s busiest and most important shipping lanes.
Saudi Arabia is taking the advance seriously. Crown Prince Mohammed bin Salman reportedly asked Washington for military help against the Houthis as the front moved south. Shipowners, charterers, insurers and governments are watching the same coastline.
Despite all of this, Bab el-Mandeb remains open. Tankers and cargo ships are crossing it, Suez is operating, and Saudi crude continues to load on the Red Sea coast. The immediate problem is a sharp increase in the threat to shipping in a strait that, because of the situation in Hormuz, the world cannot afford to lose.
The Other Way Out
The reason Bab el-Mandeb matters so much more today starts about 1,200 miles to the east.
In the fourth quarter of 2025, 21.6 million barrels of crude oil and petroleum liquids crossed the Strait of Hormuz every day. By the second quarter of this year, throughput had fallen to 4.9 million barrels per day. The effective closure of the vital sea lane (we’re not going to argue over whether it was ever technically “closed”) forced the Gulf Arab oil producers to rapidly change how they got their product to market.
Saudi Arabia surged crude into its East-West Pipeline, or Petroline, which carries oil from the Kingdom’s eastern production system across the country to Yanbu, where it can load onto tankers in the Red Sea.
Aramco, the state-owned Saudi oil juggernaut, pushed Petroline to its 7 million barrel-per-day maximum and says it changed roughly eighty years of normal export patterns in eight days.
That workaround is now under pressure too. On September 10, drones struck Petroline several times in the Riyadh and Medina regions, injuring people and forcing Saudi Arabia to shut the line while crews assessed the damage. Riyadh later said the drones came from Iraq.
The timing could hardly be worse. Reuters estimates roughly 4 million barrels per day had been moving through Petroline to Yanbu, and the port may have only five to seven days of export stocks available if the pipeline stays offline. The route Saudi Arabia built to get around Hormuz is suddenly depending on stored oil at one end and a threatened strait at the other.
Saudi crude could now reach the world market through the Red Sea in much greater volumes. Oil and petroleum liquids moving through Bab el-Mandeb jumped from 5.4 million barrels per day in the fourth quarter of 2025 to 8.1 million in the second quarter of 2026. That helps explain why events along a narrow strip of Yemeni coastline suddenly matter well beyond Yemen.
Bab el-Mandeb connects the Red Sea with the Gulf of Aden and Arabian Sea. At its narrowest it is roughly eighteen miles across. Southbound ships from Suez pass through it toward the Indian Ocean; northbound traffic uses it to reach Suez. Ships that decide the transit is too dangerous have another option, but it is a costly one: turn south and go around Africa.
Eighteen Miles of Water
The Houthis, an Iranian-backed terrorist proxy and part of Tehran’s so-called “Axis of Resistance,” have been shooting at ships in the Red Sea for years, so their ability to threaten Bab el-Mandeb is hardly new. What changed this week is where they can do it from.
Their advance through Mocha and Dhubab puts Houthi forces directly along the Yemeni approaches to the strait. They have also reached Perim Island, which sits inside Bab el-Mandeb itself. Reuters reported the move based on four Yemeni government sources, and AP separately reported that the Houthis seized the island. That gives them an even better perch over traffic entering and leaving the Red Sea.
They have already demonstrated the threat from the coast. On August 12, the TIHAMAH was hit off Mocha and several mariners were killed. MARAD continues to warn ships throughout the southern Red Sea and Bab el-Mandeb about anti-ship missiles, UAVs, unmanned surface vessels, small boats and boarding attempts. Moving those capabilities closer to the strait gives the Houthis shorter lines to the water and more coastline from which to operate.
For now, despite the alarm, ships are still going through. Preliminary tracking counted 28 commodity-vessel transits on September 10, right around the recent average; 25 crossed the day before. AIS data miss some ships operating dark, but we are nowhere close to seeing owners abandon the route wholesale.
Many owners did reroute after the first round of Houthi attacks in 2023 and 2024. Sending an Arabian Sea-to-Europe tanker around the Cape of Good Hope adds roughly fifteen days; depending on the voyage, the deviation can add several thousand miles and two or three weeks at sea.
That extra distance gets expensive quickly because the ship stays employed longer, burns more bunkers and returns to the available tonnage pool later. Across enough voyages, there are simply fewer ships available when charterers need them.
Freight
The Baltic Exchange, the London institution that publishes benchmark shipping rates used by owners and charterers around the world, tracks the cost of hiring tankers on major routes. One of its newer benchmarks follows Very Large Crude Carriers, or VLCCs, moving oil from the Gulf of Oman to China. A VLCC carries roughly 2 million barrels of crude.
Since March, the quoted freight rate on that route has more than doubled, rising about 130%. By September 4, a VLCC making the voyage could earn more than $260,000 per day; a week later, Reuters put the freight charge at roughly $11.50 for every barrel aboard the ship.
For a fully loaded VLCC, that works out to roughly $23 million just to move the cargo.
Tankers are spending longer on voyages, getting pulled onto different routes and becoming harder to find on short notice. A ship that spends another two weeks going around Africa is unavailable for its next cargo during those two weeks. And when you divert enough ships, the pool of available ships starts thinning quickly.
Owners willing to transit the Red Sea will price in war-risk insurance coverage and the danger to the ship and crew; others will take the Cape or decline the cargo. The strait can, therefore, become very expensive long before traffic stops moving through it.
Bunkers
Going around Africa also means burning a lot more fuel. In shipping, that fuel is called bunker fuel, or simply “bunkers.”
When ships diverted away from the Red Sea in 2024, Singapore, the world’s largest bunkering port and a major refueling stop on Asia-Europe routes, sold a record 54.9 million tonnes of bunker fuel, up 6% from the year before. Singapore’s maritime authority attributed part of that increase to the longer voyages around the Cape of Good Hope.
Those extra miles add up quickly. A tanker that spends another two weeks at sea keeps burning fuel every day, and hundreds of ships making the same decision can push bunker demand materially higher even if the amount of cargo moving around the world barely changes.
Fuel is already getting more expensive in the region. Fujairah, one of the world’s largest bunkering ports and located just outside the Strait of Hormuz, saw the price of very-low-sulfur fuel oil rise from about $852 per metric ton on September 4 to $959 a week later, an increase of roughly 13% in seven days. Compared with late August, the price is up about 21%. Supplies across the major marine-fuel grades are also extremely tight.
More ships diverting around the Cape would add demand on top of that. They also have to refuel somewhere, which shifts business toward ports positioned along the longer route. Singapore saw exactly that during the last major Red Sea disruption.
For shipowners, the math is straightforward: take the shorter Red Sea route and accept the security and insurance costs, or sail thousands of miles farther and buy a lot more fuel.
Running Bab el-Mandeb
MARAD, the U.S. Maritime Administration, now advises U.S.-flagged vessels in the region to turn off their Automatic Identification System, or AIS, when safe navigation allows it, vary course and speed to make targeting harder, and refuse Houthi demands for voyage information or AIS activation. Ships also maintain contact with U.S. Naval Forces Central Command while operating in the area.
AIS is the system ships use to broadcast their position, course and speed to other vessels and authorities. Normally, that makes navigation safer, but off Yemen, it can also tell an attacker exactly where a ship is and where it is headed.
That puts masters in an uncomfortable position. Do you keep your AIS on and make yourself easier to track, or turn it off and lose one of the basic tools used to keep commercial traffic separated in a crowded sea lane?
Insurance, for obvious reasons, has moved with the threat. War-risk insurers have expanded the areas they consider exposed to conflict to include Bab el-Mandeb, the Yemeni and Saudi Red Sea coasts, and a much larger section of the Gulf of Aden and Indian Ocean. Owners can still insure the voyage, but that risk now gets priced directly into the cost of sending a ship through. And that’s a price that’s going to be pumped to consumers along with the oil shipments.
Merchant ships move through these waters around the clock, and the threat can come from shore-based missiles, drones, unmanned surface vessels and small boats. No navy, despite the best efforts of a fairly large coalition of nations, can put a warship next to every tanker or contain every launch site along the Yemeni coast.
That leaves the final decision with the owner and master of each ship. They have to decide whether the shorter Red Sea route is worth the security risk, insurance cost and operating restrictions, or whether another two weeks around Africa makes more sense. And they have to make that decision with the Houthis perched like vultures over Bab el-Mandeb.