[Salon] The Houthi Threat is Not to Israel, But to the World

[Chas Freeman <cwfresidence@gmail.com>]

The Houthi Threat is Not to Israel, But to the World

Israel is too far away for Iran’s Yemeni allies to do real damage there. But there are juicy targets much closer at hand.

Bobby Ghosh Mar 29

The Houthis' daggers are no longer sheathed.

The world watched, with varying degrees of alarm, as the Houthis entered the war in the Middle East. The Yemeni group, long aligned with Iran, fired what it claimed was a barrage of missiles at Israel on Saturday morning.

The IDF intercepted the incoming projectiles without difficulty — as it has intercepted the great majority of the long-range Houthi attacks launched at Israel since 2023. At more than 2,000 miles from Sanaa, Israel is a hard target for Yemen’s arsenal, and for now the danger there is limited.

The more urgent question for the wider world is what the Houthis will do next — specifically, whether they take aim at targets considerably closer to home.

The biggest concern was flagged in a single line from a Bloomberg report published on the morning of the Houthi salvo: Saudi Arabia’s East-West pipeline has hit its full capacity of 7 million barrels per day. Tankers are queuing at the Red Sea port of Yanbu to collect the crude. The pipeline, 750 miles of steel threading across the Arabian Peninsula, has become, overnight, the most important piece of industrial infrastructure on earth.

And the people who just fired those missiles are sitting awfully close to the other end of it. Yanbu is just 600 miles from the Saudi-Yemeni border.

Now lets get the numbers straight, because the numbers are what make this terrifying. Before the US and Israel struck Iran on February 28, roughly 20 million barrels of oil per day flowed through the Strait of Hormuz — one-fifth of everything the world burns, according to the IEA’s own data for 2025. Iran’s de facto closure of that strait has choked off approximately 15 million barrels of Gulf crude exports, with the IEA’s March Oil Market Report describing this as the largest supply disruption in the history of global oil markets.

Saudi Arabia and the UAE have two bypass routes — the East-West pipeline to Yanbu and Abu Dhabi’s ADCOP pipeline to Fujairah — with a combined maximum capacity of 8 to 9 million barrels per day. Experts reckon that even if these pipelines run at full tilt, that will leave about 10 percent of global supply bottlenecked until transit through Hormuz resumes.

That is why Brent crude is trading above $100 a barrel for the first time in years, with periodic spikes above $110. That is why the IEA organized the largest emergency reserve release in its 50-year history — 400 million barrels across 32 member countries, which sounds enormous until you realize, as the US Energy Department’s own delivery schedule implies, that it amounts to roughly 1.4 million barrels per day — barely 15 percent of the supply lost through the Hormuz closure.

The Trump administration, according to Bloomberg, is internally stress-testing a scenario in which oil reaches $200 a barrel. That is not a prediction, it is an acknowledgment that the current trajectory makes things that once seemed like pure fiction worth modeling.

The East-West pipeline — known as Petroline — was built in 1981, at a cost of $2.4 billion, by Saudi planners who feared exactly the scenario that has now arrived. They were watching the Iran-Iraq war and they understood the Strait of Hormuz’s vulnerability. The pipeline was their hedge: a desert route to the Red Sea that could keep Saudi crude flowing even if the Gulf became a war zone.

For four decades, it was a contingency: occasionally tested, but rarely stressed. This month, for the first time in its history, it is running at full capacity. Aramco CEO Amin Nasser confirmed the milestone on an earnings call, and the Bloomberg report formalized it on Saturday: the 1,200-kilometer pipeline is pumping 7 million barrels a day, of which 5 million are available for export, with the remainder feeding Saudi refineries and domestic demand.

The planners of 1981 can feel vindicated. Their pipe is now, improbably, the release valve for the global economy.

There is only one problem. In routing around Iranian leverage at Hormuz, Saudi Arabia has transferred that leverage to Iran’s most capable proxy. The Petroline deposits its crude at Yanbu, on the Red Sea. From there, that crude must be loaded onto Very Large Crude Carriers — supertankers that, because the vast majority of Saudi oil is destined for Asian markets, must head south through the Red Sea, through the strait known as Bab el-Mandeb.

The Houthis control the eastern shore of the Bab el-Mandeb. As David Butter, an associate fellow at Chatham House, wrote in an analysis just last week, the bypass pipelines are vulnerable to Iranian attack — and if the Houthis enter the fray, they could disrupt Saudi exports from Yanbu entirely.

This is not an abstract vulnerability, it is a demonstrated one. The Houthis struck the East-West pipeline with drones in May 2019, temporarily shutting it down. They have struck targets around the pipeline on at least four separate occasions over the past decade. Earlier this month, a drone hit a refinery at Yanbu, and a ballistic missile targeting the port was intercepted.

The Houthis have not yet trained their full arsenal on Saudi Arabia’s last oil exit — but they have been ranging in.

What would a sustained disruption of Yanbu do to oil prices? Gregory Brew, a historian of Iranian oil and senior analyst at Eurasia Group, put the incremental figure plainly: “If the Houthis attacked Yanbu and if they did enough to disrupt exports from the terminal, then you’re looking at a disruption of 7 million barrels per day.” Add that to the existing Hormuz shortfall and the total supply shock climbs toward 15 million barrels per day or more.

Major banks are already running the numbers: Barclays puts Brent at $130 to $150 under a full dual-chokepoint scenario; Macquarie assigns a 40 percent probability to $200 oil by June — a nominal price never reached in the history of markets; Goldman Sachs warns that even a credible threat to the Bab el-Mandeb, without a shot fired, could push prices to $120.

The 400-million-barrel IEA reserve release — the largest in the agency’s 50-year history — covers roughly four weeks of the current disruption, per Wood Mackenzie. After that, there is no reload. A supply shock of this scale would be three to five times larger than the 1973 Arab embargo, which removed just 7 percent of global supply and still produced a 300 percent price increase. The IMF estimates that a 10 percent rise in oil prices adds 0.3 to 0.4 percentage points to global headline inflation within 12 months.

I’ll leave you to do the arithmetic on oil at $150. And at $200.

Here is the question that separates serious analysis from commentary, and the answer is more interesting than a simple yes or no.

Iran’s control of Hormuz rests on geography and military capacity. Its territory borders the strait. Even with its conventional navy destroyed by US attacks, its speedboats and missile forces are sufficient to make commercial transit lethal, forcing the world’s largest shipping companies to sit on their hands. The Houthis don’t have comparable numbers of boats and missiles. They cannot impose the same kind of militarized exclusion zone in open water against the US Fifth Fleet.

But they don’t need to. As the Armed Conflict Location and Event Data project (ACLED) notes in its 2026 Red Sea analysis, “the Houthis’ real strength lies not in the volume of their arsenal but in their ability to sustain a high perception of risk.”

Between late 2023 and mid-2025, the Houthis launched more than 130 attacks on commercial vessels in the Red Sea corridor. They never formally closed the Bab el-Mandeb. And yet, the US Defense Intelligence Agency reported that those attacks caused a 90 percent decrease in container shipping through the Red Sea from December 2023 to February 2024. According to UNCTAD’s annual review, Suez Canal traffic fell from 2,068 transits in November 2023 to roughly 877 by October 2024. The EIA confirmed that oil flows through the Bab el-Mandeb were cut in half.

All that, without physically shutting the strait: the Houthis simply made shipping in those waters commercially uninsurable for most operators.

They could do the same thing now, at a moment when Saudi Arabia has no alternative to Yanbu, and when the economic consequences of even partial disruption would be catastrophic rather than merely costly.

As a number of analysts of the Middle East have observed, the Houthis function as Iran’s most potent reserve card — to be played when Tehran judges the moment has arrived. Saturday’s missile volleys suggest that moment may be closer than markets currently price.

There is one real constraint: the uneasy ceasefire the Houthis have maintained with Saudi Arabia since 2022. Attacking Yanbu directly — striking the kingdom’s territory, its refineries, its port infrastructure — would cross a line that Riyadh could not ignore and would invite a devastating response. But, as the International Crisis Group’s Ahmed Nagi told Radio Free Europe: “If the military pressure on Iran increases or the war enters a more critical phase, the Houthis could still jump in despite the potential costs on their domestic front in Yemen.”

Note the precision of Saturday’s statement from the Houthis’ deputy information minister: “We are conducting this battle in stages, and closing the Bab al-Mandeb strait is among our options.” That’s not a threat, it is a declaration of leverage. The Houthis are showing the world their next card before they decide whether to play it.

The more likely near-term move, and arguably the more insidious one, is not a direct strike on Saudi soil but a resumption of the 2023 Red Sea campaign: sporadic attacks on tankers loading from Yanbu, sufficient to drive insurance withdrawals and shipping-company exits without formally crossing the threshold of striking Saudi territory. The effect on oil markets would be similar. The political cost to the Houthis would be considerably lower.

Here is the strategic geography, stated plainly. Block Hormuz and Gulf crude cannot leave the Persian Gulf. Block Bab el-Mandeb and it cannot reach Europe or Asia from the Red Sea. Together, they constitute the entire export pathway for Gulf oil. You can route around one of them, but there is nowhere to route around both.

The men who built the Petroline in 1981 were prescient enough to see that the Strait of Hormuz was vulnerable. But they couldn’t have anticipated a scenario in which bypassing one chokepoint would only deliver Saudi oil to a second, controlled by the same adversary’s most formidable ally.

That pipeline is running at full capacity today. Whether it is still running at full capacity next week may be the most consequential question in the global economy — and it will be answered not in Tehran, not in Washington, not in Jerusalem, but in Sanaa.