Iran's Ace in the Hole: The Houthi Card That Could Seal the Last Exit for Middle Eastern Oil

Iran has closed the front door. The Strait of Hormuz — 21 percent of global oil, 20 million barrels per day — is effectively blockaded. The world's response has been to reroute through the back door: Saudi Arabia's 1,200-kilometer East-West Pipeline, pumping crude from the Abqaiq oil fields to the Red Sea port of Yanbu. Aramco CEO Amin Nasser confirmed in early March that the pipeline was ramping to its full capacity of 7 million barrels per day. Kpler tanker tracking data shows Yanbu averaged 2.2 million barrels per day in the first nine days of March — more than double its pre-war rate, a 330 percent surge according to Windward Maritime AI.

There is one problem. The back door runs directly past Iran's most capable proxy.

THE GEOGRAPHY OF VULNERABILITY

Saudi crude exported from Yanbu must pass through the Bab al-Mandeb Strait — the 16-mile-wide "Gate of Tears" that separates the Arabian Peninsula from the Horn of Africa. Under normal conditions, 4.2 million barrels of oil flow through this chokepoint daily, accounting for approximately 12 percent of global seaborne oil. Fifteen percent of all global trade passes through the Red Sea.

Yemen's Houthi movement, formally Ansar Allah, controls the western coastline along the Red Sea for hundreds of miles. From this coastline, they have demonstrated the capability to strike commercial vessels with anti-ship missiles, explosive-laden drones, and naval mines. Between October 2023 and May 2025, during the Red Sea crisis triggered by the Gaza war, the Houthis attacked dozens of commercial ships, forced major carriers to reroute around the Cape of Good Hope, cost Egypt an estimated $10 billion in lost Suez Canal revenue, and fundamentally disrupted Asia-Europe supply chains.

They proved they can shut this chokepoint. And right now, they are choosing not to.

THE MYSTERY OF HOUTHI RESTRAINT

Three weeks into the US-Iran war, the Houthis have launched zero attacks on Red Sea shipping. This baffles analysts.

Michael Hanna, a Middle East expert at the International Crisis Group, told The National: "We are not exactly sure, to be honest. There are some theories, of course, and some of them are plausible, including one that says the Iranians are holding off Houthi attacks on Red Sea shipping in reserve, as part of strategic patience."

The restraint is conspicuous because other Iranian proxies have already joined the fight. Hezbollah in Lebanon is launching missiles at Israel. Iraqi militias are hitting US targets across Iraq, Kuwait, and Jordan. The Houthis — the group with the most proven anti-shipping capability — remain on the sideline.

Three theories attempt to explain why.

The first is the ceasefire theory. In May 2025, the US and the Houthis reached an Oman-brokered agreement: the US would stop bombing Yemen, and the Houthis would stop attacking commercial shipping. Under this deal, neither side would target the other, including US vessels in the Red Sea and Bab al-Mandeb. The Houthis may be calculating that breaking this deal now — with a massive US naval presence in the region — would invite devastating airstrikes on their territory with no Iranian air defense to protect them.

The second is the Saudi diplomacy theory. Saudi Arabia has been quietly working diplomatic channels to keep the Houthis out of this war. Riyadh has existential stakes: if the Houthis close the Red Sea, Saudi Arabia loses its last maritime export route. The kingdom led an anti-Houthi military coalition from 2015 to 2023 and understands the group's capabilities intimately. A Saudi-Houthi understanding — formal or informal — to keep the Red Sea open would explain the restraint.

The third is the strategic reserve theory. This is the one that should keep shipping executives awake at night. Iran may be deliberately holding the Houthis in reserve as an escalation card. As long as the Red Sea remains open, the Hormuz crisis is manageable — painful, but survivable. Oil reroutes through Yanbu. Prices spike but supply continues. The moment Iran activates the Houthis, the crisis becomes existential. Both chokepoints close simultaneously. Approximately 30 percent of the world's seaborne oil becomes inaccessible. There is no third bypass.

THE DUAL CHOKEPOINT SCENARIO

The numbers are stark. The Strait of Hormuz normally handles 20 million barrels per day. The Bab al-Mandeb handles 4.2 million barrels per day. Together, these two chokepoints account for approximately 24 million barrels per day of oil transit — roughly 30 percent of global seaborne oil trade.

The bypass infrastructure was designed for a short disruption, not a prolonged siege. Engineering News-Record reported that the Saudi East-West Pipeline and the UAE's Abu Dhabi Crude Oil Pipeline (ADCOP) to Fujairah can collectively move 3.5 to 5.5 million barrels per day — roughly one-quarter of what normally flows through Hormuz alone. And crucially, the Saudi pipeline's output goes to Yanbu on the Red Sea, meaning it is only useful if the Red Sea remains open.

If both chokepoints close, the only remaining route for Gulf oil is the UAE's ADCOP pipeline to Fujairah on the Arabian Sea — a single pipeline with approximately 1.5 million barrels per day capacity. That is 7.5 percent of what Hormuz and Bab al-Mandeb normally handle combined.

The impact on shipping would be catastrophic. VLCC rates, already at record levels above $400,000 per day on Hormuz disruption alone, would have no ceiling. Tanker demand for alternative routes — West Africa to Asia, US Gulf to Europe, Brazil to China — would surge. Insurance markets would face a simultaneous war risk listing across both the Persian Gulf and the Red Sea, an unprecedented scenario no underwriter has modeled for.

WHY THE PHONE CALL HASN'T BEEN MADE — YET

Iran's decision to hold the Houthis back is rational game theory. The threat of dual chokepoint closure is more valuable than the act itself. As long as the Red Sea is open, Iran maintains leverage in three directions.

Against the United States: the threat gives Iran a credible escalation rung above Hormuz. If Trump follows through on his 48-hour ultimatum to strike Iranian power plants, Iran can respond by activating the Houthis — an asymmetric escalation that would cause massive economic damage without requiring Iran to fire another missile itself.

Against Saudi Arabia: the implicit threat keeps Riyadh on the diplomatic track. Saudi Arabia's willingness to work behind the scenes to maintain Houthi restraint is itself a form of leverage for Iran — it forces the kingdom to moderate its stance in the broader conflict to protect its oil export lifeline.

Against the global economy: the Houthi card gives Iran negotiating leverage in any future peace talks. Offering to "guarantee" Red Sea stability becomes a bargaining chip worth hundreds of billions of dollars in avoided economic damage.

On March 14, senior Houthi officials complicated this calculus by announcing they had decided to align militarily with Iran, declaring "Hour Zero" for coordinated operations against the US and Israel. Whether this declaration translates into action — or remains posturing — is the question on which trillions of dollars of global trade now rests.

WHAT THIS MEANS FOR SHIPPING

For the maritime industry, the implications are binary.

If the Houthis stay quiet, the Hormuz crisis remains manageable. Oil reroutes through Yanbu. Tanker rates remain elevated but functional. Insurance costs are concentrated on the Persian Gulf. Supply chains adapt.

If Tehran makes the call, the shipping industry faces a scenario it has never experienced: simultaneous closure of two of the world's three most critical maritime chokepoints. Container shipping, already rerouting around the Cape of Good Hope since the 2023-2024 Red Sea crisis, would face compounded delays. Tanker markets would seize. LNG spot rates, already up 650 percent on Hormuz disruption, would become unquotable.

The war's most dangerous weapon is not a missile battery or a nuclear facility. It is a phone call from Tehran to Sanaa that has not yet been made. And the entire global shipping industry is betting — day by day, cargo by cargo, premium by premium — that it never will be.

Sources: The National (March 17, 2026), NBC News (March 18, 2026), Sunday Guardian Live (March 15, 2026), CNBC (March 2, 2026; March 12, 2026), Firstpost (March 15, 2026), Business Today India (March 15, 2026), Engineering News-Record (March 15, 2026), Horn Review (March 17, 2026), Wikipedia (2026 Strait of Hormuz crisis; Red Sea crisis; East-West Crude Oil Pipeline; 2025 US-Houthi ceasefire), Reuters (May 6, 2025), The Guardian (May 6, 2025), FDD Analysis (July 9, 2025), Maritime Executive (November 11, 2025), International Crisis Group (Michael Hanna, quoted in The National), Chatham House (David Butter analysis, quoted in NBC News), Kpler tanker tracking data, Windward Maritime AI, Anadolu Agency (oil chokepoint data), US Energy Information Administration (Bab al-Mandeb analysis), Wall Street Journal.