Iran’s threats against this Red Sea choke point are a big vulnerability for the oil market Iran has threatened to close the Bab el-Mandeb Strait, a critical trade route at the southern end of the Red Sea, which would significantly reduce oil supplies to an already unstable market. This threat comes amid escalating conflict in the Middle East, with Iran demanding Israel’s withdrawal from Lebanon as a condition for peace. The potential closure of the strait would cut off millions of barrels of oil, primarily from Saudi Arabia, heading to Asia, leading to a substantial impact on crude oil prices.

• Iran has threatened to close the Bab el-Mandeb Strait, a vital oil trade route, if the conflict in the Middle East escalates.
• This action would severely disrupt global oil supplies, particularly cutting off barrels from Saudi Arabia heading to Asia.
• Exports through the Bab el-Mandeb have nearly doubled since February, highlighting its importance to the oil market.
• A fragile ceasefire between Israel and Lebanon is in question, with Hezbollah rejecting the deal, increasing the risk of further escalation.
• Previous attacks by Iran’s Houthi allies in Yemen on commercial ships in the Red Sea caused traffic through the Bab el-Mandeb to plunge.