See How Houthis Put the Red Sea at Risk as an Alternative Oil Route
Saudi Arabia has diverted huge amounts of oil to the Red Sea since the Iran war began, but now the Iranian-backed Houthi militants say that they intend to block that route.
If the Houthis make good on their threat to blockade ships traveling to and from Saudi Arabia via the Red Sea, it would yet again upend global oil markets by compromising a crucial fallback for the Strait of Hormuz.
Since the early weeks of the war with Iran, Saudi Arabia has been relying on a pipeline that bisects the country to reroute millions of barrels of oil from the Persian Gulf to the Red Sea.
Most of that oil gets to market via the Bab al-Mandab strait at the southern end of the Red Sea, off the coast of Yemen and near territory controlled by the Iranian-backed Houthi militia. A smaller portion goes north to the Mediterranean Sea, via a pipeline that crosses Egypt or, in the case of oil-derived fuel, via the Suez Canal…
If the Houthis manage to completely block Saudi Arabia from using the Red Sea, they would take roughly 4 percent of the world’s oil off the global market. That estimate, based on shipping data from Kpler, would be in addition to the current loss of supply through the Strait of Hormuz…[end quote]
There’s a big IF here. Two ships turned back but this is new news so the situation is developing.
On Truth Social, the POTUS said if the Houthis attacked any ships, the US would retaliate by bombing Iran.
Of course, the US is already bombing Iran. He’s simply admitting in a roundabout way that Iran alone controls the ability to escalate the war and the US is powerless to stop it.
Iran of course reaps several benefits by escalating the war. High gas prices and the resulting inflation will hurt the POTUS’s party in the upcoming midterms, so the longer they wait the more like the POTUS will strike a favorable deal.
Plus US stocks of air defense and precision strike weapons are running very low, and by some estimates the US will face shortages within a few weeks or months. This benefits Iran militarily and at the negotiating table.
The US air defense failures also demonstrate to Iran’s traditional enemies in the Gulf that the US is not a reliable security partner and they may look to forge security agreements with more stable partners like China.
Although it is scaling up recently it was 10 bombs per day. We have 175k tail assemblies for over 200k bombs. We have a long way to scale up and bomb iran for 3 to 4 years.
Keep in mind we need stockpiles of munitions for our own defense needs. One we reach that minimum we will be forced to throttle operations in Iran. Air defense missiles for example. We can’t use them all in Iran. We need some elsewhere and we can’t build them very quickly. What happens when we run low? Iran already has the ability to hit our bases.
Anything is possible, but this seems unlikely in the extreme. Instead of going 1/4 way round the globe, tankers would have to go 3/4 of the way, increasing costs exponentially.
While the Strait of Hormuz can (could) handle 100-125 ships a day, the [corrected] Panama Canal can’t even do 40 and it is already at the capacity almost always. The largest crude tankers can’t even fit through the Panama Canal, so they would have to make do with the mid-size tankers, and even on the smaller end of that.
A more likely scenario would be for the tankers to go through the Suez Canal and sell to the European market. US oil, which makes up over 20% of EU imports, would then be freed up to flow to the Asian markets.
Alaska oil probably mostly goes to Asia. Most U.S. oil is on the Gulf. Pipelines west may have limited capacity. Canada is building pipeline to west coast. And there’s always unit trains.
It will be interesting to see how things change, what investments are made, if the Mideast problem continues.
IIRC, there are no pipelines from Texas to the west coast.
In April China imported 23 million barrels of US petroleum and India 24 million. Japan bought 39 million barrels and South Korea 32 million. Singapore came in at 14 million, with Taiwan and Thailand each north of 5 million barrels.
