The Middle East conflict escalates! Houthi rebels ban Israeli ships from sailing in the Red Sea, causing international oil prices to surge by nearly 5%.

The Iran-backed Houthi armed group announced on Monday that it has banned Israeli ships from entering the Red Sea, posing a threat to the important shipping channel of the Strait of Hormuz. International oil prices surged by nearly 5%. The Houthi armed group stated in a declaration on Monday: "We announce a comprehensive ban on Israeli maritime navigation. We consider all enemy actions to be legitimate military targets for our forces." This move comes as the Iran war enters its fourth month, with regional conflicts escalating and threatening the fragile ceasefire agreement, making the prospects for peace talks even more complicated. Due to the conflict involving Iran, the Strait of Hormuz is nearly closed, forcing major exporters in the Middle East to seek alternative routes to access global markets. In retaliation for Israel's war in Gaza, the Houthi armed group launched attacks on commercial ships in the Red Sea between 2023 and 2025. These militants targeted vessels linked to Israel, but the definition was too broad. Many ships were affected, and even aircraft carriers were sometimes accidentally hit. Traffic in this waterway was paralyzed at times. Following the Strait of Hormuz, the Bab el-Mandeb Strait became a "storm eye" in shipping. The Houthi armed group is not directly involved in the US-Israeli military operations against Iran, but the organization has repeatedly warned that they may block the Bab el-Mandeb Strait, a narrow waterway connecting the Red Sea, the Gulf of Aden, and the Indian Ocean. The Bab el-Mandeb Strait is one of the world's important trade chokepoints. With Iran frequently attacking oil tankers and cargo ships, the oil exports through the Strait of Hormuz have plummeted, making the Bab el-Mandeb Strait an important channel for oil supply. After traffic in the Strait of Hormuz was disrupted, Saudi Arabia significantly increased its oil transportation through its east-west pipeline, diverting millions of barrels of crude oil daily to the Red Sea and then shipping it to Asia through the Bab el-Mandeb Strait, partially offsetting supply gaps for major economies such as Japan and South Korea. Kpler data shows that in April, the crude oil and refined oil exports through the Bab el-Mandeb Strait nearly doubled to 7.2 million barrels per day, compared to 3.9 million barrels per day before the US and Israel attacks on Iran in February. The Iranian Islamic Revolutionary Guard Corps threatened last week that if Israel does not stop military strikes in Gaza and Lebanon, they will close the Bab el-Mandeb Strait. In response, Matt Smith, Head of Commodity Research at Kpler, stated that if Iran closes the Bab el-Mandeb Strait, it will cut off Saudi Arabia's crude oil supply to Asia. He said, "This means a significant escalation of the conflict, and the impact on the market will also intensify. The transport of oil through the Red Sea is one of the key factors to prevent a sharp rise in oil prices." Smith also stated that the Houthi armed group can disrupt shipping in the Bab el-Mandeb Strait without large-scale operations. He added, "They don't need to attack every passing oil tanker, just precise strikes on some targets are enough to deter vessel passage." As of the time of writing, WTI crude oil prices have risen by 4.77% to $94.86 per barrel; Brent crude oil prices have risen by 4.73% to $97.49 per barrel.