Daily · Strait of Hormuz and Bab el-Mandeb Crisis · September 13, 2026

Key points

Houthi seizure of Bab el-Mandeb chokepoint

The Houthis seized the Red Sea port city of Mocha on Thursday and captured Mayun island, also known as Perim, on Friday. This offensive completed their takeover of the Bab el-Mandeb shipping lane, which carries approximately 4 million barrels of oil and gas daily. The International Organization for Migration reported that at least 76,000 people have fled their homes in Yemen since July, with 1,400 refugees arriving in Djibouti within a single 24-hour period.

Iranian officials expressed support for the Houthi advance. IRGC spokesman Hossein Mohebbi described the victories as a "divine triumph," while Iranian Parliament Speaker Mohammad Bagher Ghalibaf invoked past statements from the late Supreme Leader Ayatollah Ali Khamenei. The Houthis are targeting ships transiting for Saudi Arabian oil exports, which had become a critical alternative to the Strait of Hormuz following the latter's blockade.

Government forces and Saudi Arabia responded with counterstrikes, reporting nearly 130 airstrikes on Houthi positions over 48 hours. Houthi military spokesman Yahya Saree claimed attacks inside southern Saudi Arabia, including strikes on a military base in the Sharurah region. The conflict has displaced tens of thousands, with entire villages reportedly emptied in districts such as Maqbanah and Jabal Habashi.

The mechanism linking this event to markets involves the removal of the primary alternative shipping route for Middle East oil to Asia. With the Strait of Hormuz restricted, the Bab el-Mandeb was the main safety valve; its closure by Houthi forces threatens a second critical chokepoint. Historical precedent suggests that control over such straits allows actors to leverage regional security against global energy flows. The next step to watch is whether Saudi Arabia or the US will authorize direct military intervention to reopen the strait, as Crown Prince Mohammed bin Salman reportedly requested from President Trump.

Hormuz route agreement and GCC summit

Iran and Oman agreed on the details of new entry and exit routes for the Strait of Hormuz following intensive technical talks. Under the understanding, the Gulf's entry route lies entirely within Iran's territorial waters, and a portion of the exit route also falls within Iranian territory. The agreement is to be presented at a regional meeting in Muscat on Monday, where Gulf littoral states' foreign ministers are scheduled to exchange views.

Bahrain's Ministry of Foreign Affairs stated it will not participate in any collective meeting that includes Iran before the resumption of diplomatic relations between the two countries. Bahrain cited attacks on infrastructure across the Gulf and called for Hormuz to be open without discrimination, fees, or permits. A source familiar with the meeting told Tasnim news agency that the strait will not reopen unless the US meets Iran's conditions on the waterway.

Shipping traffic through the Strait of Hormuz has plummeted by about 95 percent since the start of the war, dropping from a pre-war average of roughly 130 to 140 ships per day to an average of five to seven vessels a day. The agreement comes amid an ongoing blockade imposed by US forces targeting vessels traveling to or from Iranian ports. Tehran is still seeking an agreement that will let it charge ships a toll, a condition Muscat rejects.

The interests of the actors are distinct: Iran seeks to maintain leverage over global energy flows and secure financial terms for passage, while Oman aims to stabilize the region and protect its own shipping interests. The US aims to keep the strait open for global trade without recognizing Iranian sovereignty claims over the waterway. The mechanism here is a potential shift in shipping insurance and route planning if the new routes are operationalized, though the strait remains closed pending US-Iran negotiations.

Saudi pipeline closure and drone attack

Saudi Arabia temporarily closed its 1,200-km East-West pipeline as a precaution after a drone attack that both Baghdad and Riyadh said originated in Iraq. The pipeline has served as the main route for Middle East oil exports for the past six months while the Strait of Hormuz has been largely shut, moving 4 million to 5 million barrels per day, which amounts to 4% to 5% of global supply. Satellite images showed black smoke rising from an area of the pipeline south of Medina.

US President Donald Trump said Iran was probably to blame for the strike, while Saudi Crown Prince Mohammed bin Salman phoned Trump on Thursday to ask for US military help fighting the Houthis. Trump confirmed he had spoken to the crown prince and said Washington would not intervene directly for now but would help with intelligence. Iraqi security forces located and seized a drone-launching platform allegedly used in the attack, and Iraqi Prime Minister Ali al-Zaidi reshuffled military commanders in border regions.

The targeted areas covered roughly 1,100 kilometres from Medina and 800km from Riyadh, suggesting the attack likely involved long-range, advanced drones rather than tactical ones. Saudi Arabia decided against retaliating for now, following a request from Baghdad. Political analyst Salim Zakhour told Al Jazeera that Saudi Arabia sought "political containment through the Iraqi government" rather than direct escalation.

The closure of this pipeline removes the primary alternative to the Hormuz route, directly affecting energy supply chains for Asia and Europe. The mechanism is a reduction in available global oil supply capacity, which contributes to higher prices and increased shipping costs. The next step to watch is whether Iraq can identify and prosecute the specific militia responsible, and whether Saudi Arabia will resume pipeline operations once security is assured.

ECB rate hike and energy inflation

The European Central Bank raised its key interest rates on Thursday, 10 September 2026, to contain inflation that is well above the 2% medium-term target, standing at 3.3% in the euro area. ECB President Christine Lagarde attributed the inflation shock to the conflict in the Middle East and the destruction of refining capacity around the world, especially in Russia, which has increased energy costs and driven all prices higher.

Lagarde said the current shock is longer-lasting than previously expected, with the conflict continuing and volatility and pressure on energy prices expected to persist. She acknowledged that France, with subdued growth and lower inflation than neighbouring countries, would be particularly affected by the rate increase, but stressed the ECB must work for the entire euro area. Lagarde also called for structural reforms in France, including the capital markets union and labour market flexibility.

In an interview with Ouest-France, Lagarde confirmed she will leave the ECB in October 2027, when her term is due to end. She said she will not be a candidate in the French presidential campaign and will not return to national politics after leaving the ECB. The rate hike raises borrowing costs across the euro area, directly affecting corporate financing, real-estate investment, and monetary-policy-dependent strategies for technology and finance decision-makers.

The mechanism linking the Middle East conflict to ECB policy is the transmission of energy price shocks into broader inflation. As refining capacity is destroyed and shipping routes are disrupted, energy costs rise, feeding into general price levels. The ECB's response is a defensive measure to anchor inflation expectations, even at the cost of slowing economic growth. The next step to watch is whether the rate hike will be sufficient to bring inflation back toward the 2% target or if further increases will be necessary.

BRICS New Delhi Declaration

The BRICS Summit concluded in New Delhi on Sunday after two days of discussions involving leaders from the grouping's 11 member countries and 10 partner countries. The New Delhi Declaration was adopted on the first day, urging maximum restraint on the war in the Middle East and condemning attacks on civilian infrastructure and peaceful nuclear facilities, but it assigns no blame. The declaration makes no mention of Russia's war in Ukraine, a departure from previous BRICS declarations.

The declaration lists concerns over indiscriminate rising tariffs and condemns unilateral sanctions but stops short of naming the US. Prime Minister Narendra Modi said at the summit that the group is "not against anyone." The negotiations saw differences on several contentious issues, but India led sustained consultations that went on till 4 am to bridge competing positions and build consensus among members.

The bloc pledged greater trade in local currencies, closer cross-border payment links, and called for reforms to institutions such as the International Monetary Fund and the World Bank to give developing economies a greater voice. Iranian President Masoud Pezeshkian said US and Israeli attacks on Iran demonstrated that economic resilience cannot be sustained without security. Chinese President Xi Jinping called on BRICS members to oppose sovereignty violations, reject protectionism, and support the multilateral trading system.

The declaration's deliberate ambiguity on Ukraine and the US signals BRICS members' reluctance to confront Washington directly. The mechanism here is a potential shift in global trade and financial architecture, with BRICS promoting alternative payment systems and local currency transactions to reduce dependence on the US dollar. The next step to watch is whether these pledges will translate into concrete operational frameworks for trade and finance among member states.

Oil market outlook and tanker rates

Oil industry executives at the Asia Pacific Petroleum Conference are bracing for a prolonged US-Iran war, with Brent above $100 per barrel and tanker rates at record highs. The benchmark daily rate for a very large crude carrier (VLCC) to ship oil from the Middle East to China has hit a record high of almost $800,000, per data compiled by Bloomberg. The freight rate for a tanker from the Persian Gulf to North Asia has surged to $30 per barrel of crude, up from $6 per barrel before the war.

Insurance rates are currently running at $2.50 per barrel, up from $0.05 per barrel. Vitol's chief executive Russell Hardy said at APPEC: "We're still not running enough refining capacity to prevent those draws, and we keep eating into the surplus that exists around the world." An APPEC delegate told Reuters: "We need a political settlement, but that will take regime change in Washington or Tehran," adding it was more likely for regime change to take place in the United States than in Iran.

The war is expected to extend into next year and possibly last until Trump's term in office ends, according to delegates at APPEC. Oil prices surged above $100 per barrel; the $109 price recorded on Thursday night was identified as the result of Ansarallah's dramatic and rapid territorial advances, which sharply intensified geopolitical risk. Contributing factors include ongoing restrictions in the Strait of Hormuz, increased control by Yemen's Ansarallah around Bab al-Mandab, reduced Russian supply and refining capacity, declining global inventories, and changes in China's oil purchasing patterns.

Sustained Brent above $100, record tanker and insurance rates, and a structural fuel capacity shortfall signal prolonged energy cost inflation and supply-chain disruption. The mechanism is a combination of physical supply constraints and risk premiums embedded in shipping and insurance costs. The next step to watch is whether diplomatic breakthroughs in Hormuz or Bab el-Mandeb will alleviate the supply crunch or if the high-cost environment will persist into 2027.

Our read

The simultaneous tightening of both major Middle East shipping chokepoints, Hormuz and Bab el-Mandeb, represents a structural shift in global energy logistics that cannot be resolved by short-term market adjustments. The Houthi seizure of Perim island and the Saudi pipeline closure have removed the primary alternatives to the blocked Strait of Hormuz, creating a dual-chokepoint scenario that historically leads to sustained price volatility and supply chain reconfiguration. For decision-makers in technology and regulated finance, this implies that energy cost inflation will remain a persistent factor in operational planning, necessitating a review of exposure limits and counterparty risk assessments for entities dependent on Middle East oil flows. The ECB's rate hike confirms that central banks are prioritizing inflation containment over growth support in the face of external supply shocks, which will likely keep borrowing costs elevated across the euro area for the foreseeable future. The BRICS declaration's focus on local currency trade and alternative payment systems signals a long-term trend toward financial de-dollarization, which may gradually reduce the impact of US sanctions but also increase complexity in cross-border transactions. Companies should monitor the Muscat talks for any concrete changes in Hormuz routing, as even partial reopening could provide temporary relief to shipping costs, but the underlying geopolitical tensions suggest that the high-risk environment will persist.

This analysis was produced automatically by a large-language-model system from the public sources listed below. It is AI-generated content: it reflects the sources and the model's processing, not an editorial opinion, and may contain inaccuracies. It is not investment, financial or legal advice and contains no call to action; base decisions on the original sources and on advice from qualified professionals.

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