Yemeni Conflict Pushes Brent Crude to $105 as Red Sea Shipping Routes Face Crisis
Rising conflict in Yemen and Bab al-Mandeb threatens global oil routes, pushing Brent crude to $105 a barrel and straining alternative shipping corridors.
Intensifying battles in Yemen and a renewed Houthi momentum threaten key Red Sea shipping lanes, pushing Brent crude to about $105 a barrel. Yemen has become a critical factor in global energy equations as it threatens alternative routes designed to bypass disruptions in the Strait of Hormuz.
The Shift from Hormuz to the Red Sea
According to the U.S. Energy Information Administration, 8.1 million barrels per day of oil and petroleum products passed through the Bab al-Mandeb strait in the second quarter of 2026, compared to just 5.6 million barrels in the first quarter. This surge occurred as traffic through Hormuz plunged from 21.6 million barrels per day at the end of 2025 to roughly 4.9 million in Q2 2026.
Saudi Arabia has relied on its East-West pipeline to channel up to 7 million barrels daily to Yanbu on the Red Sea coast. However, Houthi advances along the western coast jeopardize this vital energy security asset.
Economic Toll on Global Shipping and Egypt
Shipping markets react to risk long before actual blockades occur. Higher risk translates into elevated insurance premiums, security costs, and vessels rerouting around Africa, adding roughly two weeks to journeys between Asia and Europe.
Egypt remains a primary victim. President Abdel Fattah el-Sisi estimated in July that Bab al-Mndeb disruptions have cost Egypt over $10 billion in Suez Canal revenues. A renewed escalation threatens to divert shipping and drain Cairo of crucial foreign currency reserves.
A prolonged crisis in the Red Sea acts as an indirect tax on global trade, reducing flexibility in the global oil market.
Even for Saudi Arabia, oil at $105 is a mixed blessing. While per-barrel revenues rise, export volumes face threats, and security expenditures mount. Riyadh recently posted a $9.1 billion budget deficit in Q2 despite a 22% jump in oil revenues year-over-year, illustrating the heavy financial burden of regional instability.
