As tensions between the United States and Iran intensify by the day, there are growing signs that Iran may deploy its proxy forces into action. If that happens, there is a risk that another critical chokepoint for global maritime trade could shut down. Concerns are being raised that this could escalate beyond a conflict between just two countries into a worldwide economic crisis.
On one hand, the Donald Trump administration has made clear that oil transport through the Strait of Hormuz has recovered to nearly two-thirds of pre-war levels. US Energy Secretary Chris Wright denied reports that oil transport through the Strait of Hormuz had come to a halt due to recent American airstrikes and Iranian retaliatory actions. He revealed that around 7 million barrels of oil were transported daily over the past week, with 14 million barrels being supplied daily from the Arab Gulf region.
On the other hand, fears are growing that the scope of this conflict may not remain confined to the Strait of Hormuz alone, but could extend to the Red Sea and the Suez Canal. Retired Admiral James Stavridis, former NATO Supreme Allied Commander, warned about this in a media interview, stating that if war pressure increases, Iran could use its proxy force, the Houthi rebels, to target the Suez Canal, thereby expanding the scope of the conflict.
Amid US-Iran tensions, serious concerns have also arisen over the Bab-el-Mandeb Strait, located between Yemen, Djibouti, and Eritrea. This is a critically important route for trade and oil transport between Asia, Europe, and Africa. Iran’s Islamic Revolutionary Guard Corps (IRGC) has warned that if the United States does not withdraw its actions, it will target the major export routes of nations supporting America. In addition, the Houthis in Yemen are also threatening to shut down the Bab-el-Mandeb Strait.
The Houthis allege that Saudi Arabia violated a four-year-old ceasefire agreement by attacking Sanaa airport, and in protest, they carried out missile strikes on Saudi Arabia. The Houthis have warned that if the situation deteriorates further, both the Bab-el-Mandeb and Hormuz straits would be severely affected, and that global crude oil prices could reach $200 a barrel as a result.
The Strait of Hormuz, which connects the Persian Gulf to the Arabian Sea, carries the majority of the world’s crude oil and natural gas exports. The Bab-el-Mandeb Strait, meanwhile, connects the Red Sea to the Gulf of Aden and the Indian Ocean, serving as the backbone of European trade. Disruption to shipping through either of these two routes would damage global oil supply, drive up shipping charges, and lead to severe inflation.