Oil Prices and Gulf Stability in Flux as Yemen Battle for Red Sea Chokepoint Intensifies

The price of Brent crude oil hovered near $100 a barrel on Monday as competing forces vie for control of the Bab el-Mandeb Strait, a critical maritime chokepoint in Yemen. The volatility comes amid contradictory reports regarding the status of a key Saudi oil pipeline and escalating military operations between the Saudi-backed Yemeni government and Iran-aligned Houthi rebels.

Confusion surrounded the East-West Crude Oil Pipeline after an energy sector source told the French news agency AFP that a pumping station near Khurais, east of Riyadh, had been struck again on Sunday, halting flows. However, Reuters and Bloomberg reported on Monday that oil continued to move through the 700-mile pipeline, which connects Saudi Arabia’s eastern oil fields to the Red Sea terminal at Yanbu. The conflicting accounts follow Houthi claims on Sunday that they targeted infrastructure belonging to state oil giant Aramco in the Khurais area.

The dispute over the pipeline occurred against a backdrop of fierce combat in Yemen. The Yemeni military announced on Monday that it had launched over 1,000 strikes against Houthi positions, including artillery, fortifications, and supply lines, as part of a new offensive to retake territory. Government spokespersons claimed to have reclaimed control of the Bab el-Mandeb Strait, a assertion that Houthi-aligned media denied. Despite these claims, the Houthis have made significant ground, effectively surrounding the city of Taiz after severing its main supply route to the interim capital of Aden. Casualties from the fighting have been severe, with sources reporting more than 70 deaths in a single day.

Amid the kinetic conflict, data from maritime intelligence firm Kpler indicated that Middle Eastern oil exports from countries other than Iran exceeded pre-war levels during September. For the first time since the onset of hostilities following joint U.S. and Israeli strikes in late February, weekly shipment averages rose above the pre-conflict baseline of 18 million barrels per day. Approximately 40% of the crude is now bypassing the Strait of Hormuz, with significant volumes rerouted through Saudi and UAE pipelines via the Red Sea.

U.S. Energy Secretary Chris Wright defended the administration’s strategy on Sunday, stating that President Trump was fully aware of the risks to energy supplies before initiating the conflict. Wright argued that preventing a nuclear-armed Iran was a necessary long-term priority to stabilize energy markets. He expressed confidence that rising domestic production and slowing summer driving demand would drive prices down in the coming weeks, asserting, “Absolutely,” when asked if he expected relief from the financial squeeze on American consumers.

Diplomatic efforts remain stalled. After President Trump rejected Tehran’s proposed conditions for reopening the Strait of Hormuz, Iranian officials confirmed they were reviewing the U.S. response while preparing their own counterproposal. Iranian Foreign Minister Abbas Araghchi emphasized that there was no military solution to the war, insisting that only negotiations based on “justice and fairness” could resolve the crisis. Meanwhile, Deputy Foreign Minister Kazem Gharibabadi stated that the Islamic Republic was preparing for various scenarios as tensions over the vital shipping lane persist.