Will bombing the Houthis push oil prices even higher? (Park Jong-hoon’s Knowledge in One Shot)

Park Jong-hoon explains that financial markets breathed an initial sigh of relief when US airstrikes against the Houthis were postponed, but oil price risks persist because the Houthis could put pressure on Saudi Arabia’s Red Sea crude export route and the Bab el-Mandeb Strait. Saudi Arabia connected its Gulf oil-producing region to the port of Yanbu by pipeline to prepare for a blockade of the Strait of Hormuz. If the Houthis attack this pipeline and the port, both the Hormuz route and the alternative Red Sea route could be restricted simultaneously. Rather than simply being an Iranian proxy, the Houthis are an independent force with a population of tens of millions, substantial troop strength, weapons from the former North Yemeni government forces, and Iranian support. They need tax revenue, fuel, trade routes, and international recognition. He sees them as trying to increase their negotiating leverage by exploiting the weakening of Saudi air defenses amid clashes with Iran and the risk of being excluded from US–Iran negotiations. One scenario discussed as a military objective is to secure a source of funding by putting pressure on or capturing Marib, Yemen’s gas and oil hub. The United States reached a limited agreement under which only its own ships would be spared attacks, deepening Saudi distrust. Saudi Arabia is pursuing joint defense cooperation with Türkiye and Pakistan and is also requesting help from Egypt, China, and Russia. However, as more outside countries become involved, their differing objectives increase the risk of a prolonged war. The oil market has absorbed shocks through releases from countries’ strategic petroleum reserves, but with inventories now depleted, renewed attacks on the port of Yanbu and Red Sea shipping routes could bring it close to a tipping point for a sharp rise in oil prices. He concludes that the variables to monitor are an offensive on Marib, intervention by foreign forces, who is actually covered by ceasefire agreements, and whether the port of Yanbu is operating normally. Depending on the outcome, these could significantly affect regional dominance in the Middle East and South Korea’s crude oil import costs.