Why Iran war makes Red Sea shipping a bigger worry

One thing that has helped to limit the damage in oil markets since the Iran war largely shuttered the Strait of Hormuz is the availability of an alternative route for getting crude from Saudi Arabia to Asia: the Red Sea. 

The Houthis, an Iran-backed militant group that controls much of Yemen, throttled much of the traffic through that crucial waterway for two years starting in late 2023.

In response to Israel’s war in Gaza, they launched attacks on commercial and naval ships near the Bab el-Mandeb strait that connects the southern Red Sea to the Gulf of Aden, causing what was then the biggest disruption to global trade since the Covid-19 pandemic. 

Speculation that the Houthis could strike again has resurfaced with the US-Israeli war on Iran.

On March 25, Iran’s semi-official Tasnim News Agency warned of the potential opening of a new “front” in the conflict, prompting the US government to renew a warning over the Houthi threat to shipping. 

Q: Do the Houthis still pose a danger to ships in the Red Sea?

A: Yes. The group has come under periodic bombardment over the past decade from the US, Israel, Britain and a Saudi-led coalition.

This has weakened but not destroyed the Houthis, and the lingering risk of attacks continues to deter many Western shipping firms from going anywhere near Yemeni waters. 

Yemen’s rugged Red Sea coastline helps the Houthis conceal their weapons.

US and Israeli air strikes killed many of their leaders and destroyed a lot of military equipment in 2025. But the Houthis have managed to regroup and at least partially rearm, according to a regional official familiar with the movement’s activities.

Rival militias backed by Yemen’s neighbour Saudi Arabia and, until recently, the United Arab Emirates have failed to dislodge the Houthis from their strongholds. They still control a lot of Yemen’s Red Sea coast, including important ports such as Hodeidah.  

While their adversaries have managed to intercept several shipments of advanced missiles, the Houthis do not rely solely on Iran for weapons.

They can draw upon tribal smuggling networks inside Yemen and commercial links to defence export hubs such as China. They have also expanded efforts to assemble and manufacture their own weapons. 

Q: What’s been the effect of Houthi attacks in the Red Sea?

A: The Houthis targeted military and commercial ships more than 190 times between November 2023 and June 2024, according to the Pentagon, and the lingering threat posed by the rebel group has been enough to deter ship operators.

Many have chosen instead to head thousands of kilometres to the south around Africa’s Cape of Good Hope. The diverted journeys can take as much as 25 per cent longer than using the Red Sea and Suez Canal shortcut between Asia and Europe, according to Flexport. The trips are also more costly. 

Transits through the Red Sea incur higher costs than previously due to increased insurance premiums.

Yet it remains a significant conduit for oil, petrol and other commodities shipped on tankers and bulk carriers.

An average of about 75 vessels crossed the strait daily in 2023, according to IMF-Oxford data. In 2025, average daily traffic stood at about 33. 

Q: How would a resumption of Houthi attacks affect global trade?

A: Bab el-Mandeb has been a route of choice for east-west commerce for centuries.

Its name means “Gate of Tears”, a reference to the cross-currents, unpredictable winds, reefs and shoals that once made the 29km-wide waterway perilous for seafarers.

About 9 per cent of global seaborne trade would pass through it before the Houthi strikes began in earnest, including about 20 per cent of container traffic and more than US$2 trillion (S$2.57 trillion) worth of goods a year. 

Crude oil, diesel, natural gas, other petroleum products and bulk commodities from the Middle East and India still go through the Red Sea on their way to and from Europe as it is the shortest route.

Western sanctions on Russia following its full-scale invasion of Ukraine in 2022 made it a vital trade artery for crude flowing in the other direction as well, as Moscow is now selling the lion’s share of its petroleum to Asia. 

If they do choose to act, Houthi leaders know they can inflict more economic pain now that the Strait of Hormuz – the other vital artery for shipping in and out of the Middle East – has been largely shut off by the Iran war. 

Keeping Bab el-Mandeb open is especially important for Saudi Arabia, which has managed to maintain a significant chunk of its oil exports by sending them through a pipeline across the Arabian Desert to the Red Sea port of Yanbu for loading onto tankers.

Many of those ships need to sail past Yemen to pick up the oil cargoes, and back south through Bab el-Mandeb to reach customers in Asia.

The higher loadings from Yanbu have become a lifeline for the oil market, and one of the reasons crude prices have not spiked even higher. Saudi Arabia’s shipments through the Red Sea port have reached about 60 per cent of the kingdom’s prewar total oil exports. 

Q: Are the Houthis bound to respond to an Iranian call to arms?

A: While Iran remains their crucial backer, the Houthis would not automatically heed an order from Tehran.

Entering the regional war would almost certainly trigger a military response by the US or Israel, and the group is still recovering – militarily and economically – from the previous bombing campaigns. 

The Houthis would also need to justify entering the war to their fellow Yemenis at a time when the country’s economy is in dire straits and around half of the country’s population is suffering from acute hunger, according to the United Nations.  

Q: Who exactly are the Houthis?

A: Officially known as Ansar Allah, or Followers of God, the Houthis seized control of Yemen’s capital, Sanaa, in 2014, launching a civil war that still divides the country.

Part of a clan that hails from the north-western Saada province, the Houthis are followers of the Zaidi branch of Shi’ite Islam, which accounts for an estimated 25 per cent of Yemen’s population. 

After North Yemen and South Yemen were unified in 1990, the Houthis waged a series of rebellions before successfully taking Sanaa. As well as the capital, they control portions of the north-west of the country.

The Houthis are anti-West and anti-Israel, and are designated a terrorist group by the US and European Union. 

Like the Palestinian militants of Hamas, the Houthis receive training, technical expertise and weapons – including drones as well as ballistic and cruise missiles – from Iran. 

The militia began firing drones and missiles towards Israel soon after Hamas – which is also considered a terrorist organisation by the US and other countries – attacked Israel from Gaza in early October 2023, precipitating an Israeli military campaign. The Houthis then moved on to targeting ships. 

Originally, the group said it was focused only on vessels with links to Israel, though ships with no such direct connection were also hit.

After the US and Britain began to strike Houthi targets in January 2024, the militants said all US and British assets were legitimate targets. 

Q: What have the US and other countries done to counter Houthi attacks in the Red Sea?

A: Before the Houthis stepped up their attacks in 2023, the US and its allies were already patrolling the Red Sea to tackle piracy and smuggling in a coalition called the Combined Maritime Forces. Some ships also had their own armed security guards who could fire on approaching vessels if they looked hostile. 

The wave of Houthi strikes that year prompted the US to establish an international task force, known as Operation Prosperity Guardian, to protect vessels in the area. More than 20 countries contributed ships, personnel and information to the effort. 

The US and Britain launched naval and air attacks on Houthi positions in early 2024.

However, a year later, the Houthis threatened to resume their attacks on shipping and launch missiles at Israel in solidarity with the Palestinians in Gaza.

The US Trump administration responded with a massive cruise missile and bombing campaign. This ended with a ceasefire between the Houthis and the US.

Two months later, the Houthis resumed their attacks. Four commercial ships were targeted with missiles, drones and other weapons, severely damaging one and sinking two. 

After signalling they would wind down their campaign after Hamas and Israel reached a ceasefire in late 2025, the Houthis paused their attacks on shipping – even though Israel continued targeting Houthi-held infrastructure and killing senior figures.

The Houthis most likely needed to regroup and rebuild their missile stockpiles.  

Operation Prosperity Guardian was wound down after the May ceasefire. European warships have continued to offer some limited protection to Red Sea shipping via a separate naval mission, Aspides. BLOOMBERG