Yemen's Houthis Could Cause a Global Oil Shock That Rattles Markets
The article reports that Yemen's Houthi rebels, backed by Iran, have announced a maritime blockade on Saudi Arabia, potentially closing the Bab el-Mandeb Strait. This strait is a critical alternative export route for Saudi oil, as the Strait of Hormuz is already effectively closed by Iran. Analysts estimate the blockade could reduce global oil supplies by 7% and prevent most Saudi oil exports from leaving the region. Brent crude has already risen from $72 to $89 per barrel since early July after the US-Iran truce collapsed. The article warns that sustained high oil prices could damage economies and financial markets, citing PepsiCo's worse-than-expected Q2 results and Walmart's warning of price hikes due to soaring fuel costs. The Houthi action represents a fresh threat to global markets already strained by geopolitical tensions.
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