This Critical Oil Chokepoint Is Now Under Houthi Control | WSJ

0:00- There's a new twist in the war in the Middle East.

0:02The Iran-backed Houthis pulled off

0:04a lightning offensive last week.

0:06Now, they effectively control

0:08almost all of Yemen's West Coast,

0:10including this critical waterway,

0:12which is one of the world's busiest maritime choke points.

0:16This latest move has sparked fresh fighting,

0:18and is having major implications for global oil markets.

0:23Plus, it's putting pressure on Saudi Arabia

0:25and the US to respond more forcefully.

0:28Here's why.

0:29The Houthi rebel group has controlled most

0:31of Yemen's population for over a decade now.

0:34The Houthis are backed and funded by the Iranian regime,

0:37and their motto is "Death to America and death to Israel."

0:46In the last week, the fighters have swept down

0:48the West Coast of Yemen to the narrowest point

0:51between the Arabian Peninsula and East Africa.

0:54It's known as the "Bab al-Mandeb Strait."

0:56The waterway has long been a vital artery for global trade.

0:59But during the war with Iran,

1:01it's become even more important for global oil markets,

1:04with more than four million barrels of oil

1:06passing through every day at its peak.

1:09Houthi fighters appeared to roll right into a key port

1:12long known for its coffee trade.

1:14There, they seized armored vehicles and other supplies

1:16from the internationally-recognized government of Yemen,

1:19which is backed by Saudi Arabia and the US.

1:23Then they moved on to another important port,

1:25and critically, Perim Island.

1:27The five square mile island sits right in the Bab al-Mandeb,

1:30providing the Houthis a strategic location

1:32to control the waterway.

1:34The moves have sent global oil prices higher,

1:36and they're putting pressure on the US

1:38and Saudi Arabia to respond.

1:40After the start of the Iran war, Iran choked off shipments

1:43through the Strait of Hormuz, and Saudi Arabia

1:45started moving crude through pipelines to the Red Sea.

1:49That pipeline has kept oil flowing to global markets,

1:52but now Iran and its allies

1:54are trying to disrupt those exports.

1:57The Houthis restarted attacks on ships

1:59carrying oil from Saudi Arabia's Red Sea ports,

2:02and Iran-backed fighters launched a massive attack

2:04on Saudi's energy facilities.

2:06Last Friday, Saudi Arabia shut down

2:08its crucial East-West oil pipeline

2:10after drones fired from Iraq caused extensive damage.

2:14It's not clear when the pipeline, which is capable

2:17of carrying up to seven million barrels of oil a day,

2:19could be back online.

2:21And the Saudis are trying to move more oil

2:23through the Strait of Hormuz, in response.

2:25But Saudi oil production has already taken a big hit.

2:29It's now at its lowest level in more than three decades.

2:33The Houthis have promised that they will not let

2:35Saudi oil pass through the Bab al-Mandeb.

2:38Saudi Arabia and its most powerful ally, the United States,

2:41are now scrambling to respond to the crisis.

2:44Saudi Crown Prince, Mohammed bin Salman

2:46called Trump last week asking the US

2:48to get more involved in the fight.

2:51But the US doesn't want to get pulled

2:53into another front in the war.

2:55Last year, a 53-day US campaign against the Houthis

2:59ended with the ceasefire deal.

3:01For now, the US has advisors in Saudi Arabia

3:03helping with things like intelligence and targeting.

3:05But the journal has reported

3:07that Trump told the Crown Prince,

3:08the US would not directly carry out strikes.

3:11- The Houthis called us,

3:13and they don't wanna fight with us,

3:15they let us know, they don't wanna fight with us.

3:17- That's left the Saudis scrambling for more military help

3:20and a clear path to export its oil.

3:24Saudi's Air Force has been striking Houthi targets

3:27and Yemen's government forces, which are aligned with Saudi,

3:30are vowing to regroup and fight back.

3:34But the Houthis are now threatening

3:35to strike further into Saudi Arabia

3:37in an attempt to pressure the Saudis

3:39to withdraw their support for Yemen's government.

3:42All of that uncertainty is bad for global oil markets,

3:45with Brent crude over $100 a barrel

3:48since the Houthi campaign started.

3:50Iran and its allies are seeking to use

3:52that economic pressure against the US

3:54and its Gulf allies as leverage

3:57in a war that only seems to be expanding.