BLUF: The Strait of Hormuz is already closed. If the Houthis now seal the Strait of Bab el-Mandeb and the Red Sea, Iran’s Axis of Resistance will have transformed the Middle East’s maritime chokepoints into weapons of economic warfare—threatening to unravel the global trading system the United States spent decades building.
For months, the world’s attention has remained fixed on the Strait of Hormuz (SoH). Rightly so. With the waterway effectively shut down again in the wake of the recent round of missile and drone attacks exchanged between the United States and the Islamic Republic of Iran, the war has blocked roughly one-fifth of globally traded oil.
While policymakers obsess over the situation in the SoH, another related strategic disaster is unfolding hundreds of miles to the southwest.
Iran has maintained a regional network of non-state allies to augment their power and reach. Hezbollah in Lebanon. Hamas in Gaza. The Houthis of Yemen.
Thus far, the Houthis have stayed their hand, despite having demonstrated effective capabilities in closing down the Red Sea, and even chasing the United States Navy from the region permanently.
Nevertheless, the Houthis have not done much in the way of militarily supporting their Iranian benefactors since the Iran War initiated on February 28.
Since the US and Israel launched their unprovoked war of choice against the Islamic Republic, the Houthis have insinuated that they would close both the Strait of Bab el-Mandeb and the connected Red Sea.
Right now, with the Iranians having shut down the Strait of Hormuz, at least some of the Gulf Arab states’ energy supplies are being routed out of the region via Saudi-dominated pipelines that carry them to ships waiting in Saudi ports along the Red Sea.
Once loaded onto ships in the Red Sea, Mideast energy supplies that once ran through the Strait of Hormuz can at least reach the global market via the Red Sea and the connected Strait of Bab el-Mandeb.
But that only works so long as the Houthis stay out of the war.
After all, the global economy can keep limping on so long as some of those energy supplies produced in the Mideast can trickle through the Red Sea and Strait of Bab el-Mandeb.
But, with a demonstrated capability for shutting both of those waterways down, given their tight-knit alliance with Iran, it seems unlikely that this situation will persist.
And if the Houthis do, in fact, make good on their previous threats to close the Strait of Bab el-Mandeb and Red Sea, with the Iranians effectively shuttering the SoH, then the global economy will collapse.
Please remember, too: the SoH is not just a key energy transit chokepoint through which 20 percent of the world’s oil and 18 percent of the world’s natural gas flows. It’s also the transit node for much of the world’s industrial inputs and agricultural inputs.
Should the Bab el-Mandeb and Red Sea be closed by Iranian proxies, there is simply no way that the Trump administration or Israel could claim victory in the war.
Most observers have treated the closure of the Strait of Hormuz as a single problem. But the Strait of Hormuz forms an integrated network of commerce that effectively links the Middle East to the rest of the world.
And that web of trade routes can easily be collapsed by an enterprising and committed foe, like the Houthis. Iran’s closure of the SoH constrains global supply. Closing Bab el-Mandeb and the Red Sea controls what happens next.
That’s a decisive Iranian advantage.
Located between Yemen and the Horn of Africa, the narrow Bab el-Mandeb serves as the southern entrance to the Red Sea and, ultimately, the Suez Canal. Any vessel traveling between Europe and Asia through Suez must first transit the vulnerable Bab el-Mandeb.
One chokepoint limits exports.
The other limits distribution.
And together they form a strategic trap unlike anything seen in modern economic history.
Closing Bab el-Mandeb Changes Everything.
If the Houthis start systematically attacking commercial shipping, as they had done throughout the Biden administration, and the Iranians seal the SoH, the effects would be immediate. Insurance premiums would explode.
That would, in turn, force shipping companies to suspend Red Sea transits.
Container carriers and energy companies would then divert vessels around the Cape of Good Hope—adding significant time (and, therefore, cost) onto the journey.
As time and costs to ship goods globally increase due to the closure of shorter routes through the Middle East and Africa, the price of everything rises as shippers and other producers pass on higher shipping and insurance premiums to their consumers.
One reason shipping costs would increase for ships relying on the Cape of Good Hope route is that it would add two weeks to most journeys that would otherwise use the Mideast routes. Beyond adding an inconvenient two-week transit time, the longer journey would increase fuel costs for ships using the Cape of Good Hope route.
The longer that this condition persisted—and it’d go on a while—the fewer voyages per year that shippers would make. That’d ensure that the global merchant fleet effectively shrank overnight because vessels spent far longer at sea. So, what appeared to be a shipping delay quickly devolves into a shortage of available ships.
That shortage drives freight rates higher, delays deliveries, and cascades through every major supply chain on Earth.
All this would likely lead to severe aggregate demand destruction. Just think back to what happened during the COVID-19 global lockdowns. We’d experience something similar, only likely worse, this time around as the Houthis worked with the Iranians to seal the Strait of Bab el-Mandeb and the Red Sea.
