Strait talk: Why the oil crisis is getting worse

The Strait of Bab el-Mandeb, a critical maritime choke point controlling access to the Red Sea, faces significant disruption as Houthi rebels seize control of key coastal areas and Perim Island. This escalation threatens global trade routes, as nearly 15% of seaborne trade—including 30% of container traffic and 12% of global oil—relies on this passage. Economist Rachel Ziemba, from the Center for a New American Security, highlights how this instability creates a "Schrödinger’s Strait," where uncertainty regarding the waterway's status drives up insurance premiums, anchor rates, and global commodity prices. With Saudi Arabia’s alternative oil pipelines already under attack, the potential closure of this strait exacerbates existing supply deficits, impacting markets for crude oil, diesel, gasoline, and essential industrial inputs like sulfur and helium, ultimately straining the global economy and regional diplomatic relations.