Houthi strike puts Red Sea shipping on alert as Hormuz remains shut

Yemen’s Houthi strike on Israel has renewed fears that Bab el-Mandeb could join Hormuz as a critical choke point for global shipping and energy flows.

WHAT: The Houthis struck Israel, signalling possible escalation beyond Yemen’s battlefield.

WHY: The attack raises risks for Red Sea shipping while Hormuz remains closed.

WHAT NEXT: Traders and insurers may price in higher disruption, rerouting and war-risk costs.

Yemen’s Houthi movement has reopened a dangerous question for global shipping: whether Bab el-Mandeb can remain open if the wider regional war keeps widening. Reuters reported that the Houthis launched missiles at Israel for the first time in the current war, a move that has sharpened concerns over the security of the Red Sea just as the Strait of Hormuz remains effectively closed.

For shipowners, oil traders and insurers, the timing is awkward. Saudi Arabia has been pushing more crude through Yanbu on the Red Sea coast to bypass Hormuz, but that only increases the strategic importance of the route that passes through Bab el-Mandeb. If the Houthis decide to turn their attention back to commercial traffic, the world’s fallback export corridor could become part of the problem.

A sharper Houthi warning

The immediate trigger was the Houthi missile launch towards Israel, which Reuters said was the group’s first such attack since the wider war began. The Houthis framed the strike as part of their response to the regional conflict, reinforcing the sense that they are no longer operating only as a Yemeni militia but as an armed actor within a broader Iranian-aligned confrontation.

That is why the attack matters for shipping even before any vessel is hit. The Houthis have repeatedly used the Red Sea to project pressure beyond Yemen, and the latest strike raises the possibility that they may once again widen the target set if they judge the moment politically useful. Their military spokesman later signalled a second attack on Israel, underlining that the group is willing to sustain pressure rather than treat the incident as a one-off.

Why Bab el-Mandeb matters

Bab el-Mandeb is the Red Sea’s southern gate, and any disruption there has immediate consequences for global trade. EUNAVFOR ASPIDES said on March 28 that it was monitoring the situation closely and remained vigilant, while urging seafarers to consult its guidance through the Maritime Security Center Indian Ocean. The EU mission described the corridor as one of the world’s most vital and vulnerable sea trade routes.

That warning is especially important because the market is already dealing with the closure of Hormuz. Bloomberg said Iran has kept the strait effectively closed since the end of February, halting around 15mn barrels per day of crude shipments that would normally leave the Gulf. Saudi Arabia has responded by driving more exports through Yanbu, where Reuters and Bloomberg-linked reporting show shipments have surged towards 5mn bpd.

The result is a fragile equilibrium. The Red Sea is no longer just a transit corridor; it has become a pressure valve for the region’s oil trade. If that valve is threatened, the consequences will be felt quickly in freight, insurance and energy pricing.

A pattern of escalation

The Houthis have not yet publicly returned to a full-scale campaign against merchant shipping, but maritime risk assessments suggest the room for reassurance is limited. The Maritime Executive said the absence of new UKMTO incident reports in the southern Red Sea and Gulf of Aden suggested no immediate change in posture towards commercial vessels, yet it also noted the group’s longstanding hostility to Israeli-connected shipping.

The latest Houthi action is therefore best understood as a signal, not an endpoint. By striking Israel directly, the group can demonstrate solidarity with Iran and its allies without immediately committing itself to renewed attacks on tankers or containerships. That distinction matters, but only up to a point. Once the threshold for retaliation is crossed, shipping can become collateral almost by default.

Writing on LinkedIn, Martin Kelly, head of advisory at EOS Marine, wrote that “The Houthis launched a combination of drones and missiles towards Israel overnight in the second attack since they joined the conflict.” He added that “Israel normally responds against the Houthis after 3-6 unsuccessful Houthi attacks against Israel, or one successful impact of a Houthi done or missile.”

Kelly also said: “The Houthis are strategic in the sense that they increase the target profile gradually, which could soon see Houthi attacks against shipping and/or Gulf states if the conflict continues” [user-provided text].

His warning is relevant because the group has historically escalated in stages. It uses a mix of rhetoric, selective strikes and calibrated threats to keep adversaries guessing before moving against maritime targets. That pattern has made the Red Sea difficult to price and harder to insure.

Saudi Arabia’s exposure

Saudi Arabia’s Red Sea strategy makes the stakes higher still. Reuters reported that Yanbu crude exports have climbed sharply as Riyadh works around Hormuz, and Arab News, citing Bloomberg data, said shipments from the Yanbu terminals averaged 4.4mn bpd in the five days to March 24. Bloomberg said the kingdom is aiming to lift exports from its Red Sea ports to 5mn bpd, a target it now sees as within reach.

That progress is helpful, but not decisive. Bloomberg said the Hormuz closure has trapped around 56mn barrels of Saudi crude on tankers in the Gulf, while dozens of other vessels are waiting near Yanbu for cargoes. In other words, the kingdom has built an alternative export route, but it remains dependent on the very maritime corridor that a renewed Houthi campaign could undermine.

For refiners and traders, the commercial logic is obvious. If the Houthis threaten Bab el-Mandeb, the cost of moving oil westward rises just as the cost of moving it eastward via Hormuz has already exploded. That leaves buyers, especially in Asia, exposed to price spikes and delivery uncertainty.

The shipping industry's problem

The broader shipping sector is now facing a familiar but more complicated risk landscape. Container lines and tanker operators have already learned to reroute when needed, but the scale of disruption is not just a matter of distance; it is also a matter of confidence. Once war risk pricing rises, cargoes move more slowly, and port schedules become harder to manage.

That is why even a limited Houthi strike on Israel carries global implications. It may not immediately produce another wave of attacks on merchant shipping, but it raises the odds that such attacks return if the conflict broadens or if Israel retaliates against Houthi leadership or infrastructure. Reuters reported that the strike “pointed to a potential new threat to global shipping”, and that is the right frame for executives watching the region.

The current danger is not that Bab el-Mandeb has already been shut. It is that the market now has to price the possibility that both ends of the Middle East’s maritime system could be under pressure at once. For energy majors, carriers and insurers, that is a materially different problem from the one they faced when only Hormuz was at risk.

A more brittle balance

There is still room for diplomacy, but little evidence that it is shaping the operating environment. The EU’s ASPIDES mission says it is continuing to protect commercial traffic through one of the world’s most vulnerable corridors, while Reuters and Bloomberg reporting show that the commercial system is already adapting to a second month of upheaval in Gulf shipping.

The Houthis’ latest strike has therefore done more than expand the war’s geographical footprint. It has reminded the market that maritime trade in the region depends on a brittle balance between deterrence and restraint. If that balance breaks, the consequences will not be confined to Yemen or Israel. They will be felt in freight rates, insurance renewals, crude differentials and delivery schedules from Europe to Asia.