President Donald Trump issued a strong statement today, stating that “Iran will be held responsible for every shot fired by the Houthis.” This declaration, though brief, carries serious implications – both geopolitical and economic – especially for the global oil market. The Houthis, a rebel group from Yemen supported by Iran, have been destabilizing the Middle East for years, and now their actions could potentially affect oil prices and supplies worldwide.
Who are the Houthis and how are they connected to Iran?
The Houthis are a Yemeni rebel group that has controlled a significant portion of the country, including the capital Sanaa, since 2014. They are waging war against the Yemeni government and a Saudi-led coalition. Iran, accused of providing them with weapons and logistical support, is a key ally of the Houthis. Trump’s statement suggests that the US views the Houthis’ actions as an extension of Tehran’s policy, which could lead to direct consequences for Iran. It is worth mentioning that Yemen is located right next to the Red Sea, which is an important communication route. Increased Houthi activity has limited the use of the Red Sea and the Suez Canal for the transport of goods and raw materials, such as oil.
Impact on the Oil Market
The Middle East is the center of world oil production, and any escalation of conflict in the region threatens the stability of supplies. If Trump’s words translate into actions – such as further sanctions or military activity against Iran – Tehran may respond with decisive steps. One of the most serious scenarios is the blocking of the Strait of Hormuz, through which about 20% of global oil flows. Such a move would cause chaos in the energy markets and a sharp rise in prices.
The Houthis also have a record of attacks on oil infrastructure, including Saudi installations, which in the past temporarily disrupted production. Increased tensions could encourage them to intensify such actions, which would further destabilize the region.
Oil prices started with clear increases after US airstrikes on Houthi positions in Yemen. The Houthis maintain that they will attack ships in the Red Sea and the Gulf of Aden until Israel withdraws its blockade of the Gaza Strip. Nevertheless, we are currently observing a retreat in prices after earlier increases. It is also worth noting how extremely low speculative positions are on WTI crude oil. Source: xStation5
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