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- Iran’s Revolutionary Guard threatened this week to close the Bab el-Mandeb Strait, the trade chokepoint at the southern end of the Red Sea.
- The Bab el-Mandeb has acted as crucial relief valve for the oil market as exports have plunged through the Strait of Hormuz during the U.S.-Iran war.
- Saudi Arabia has redirected millions of barrels from the Persian Gulf to the Red Sea. Attacks on ships through the Bab el-Mandeb would cut those barrels off.
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President Donald Trump faces the risk that Iran will close the Bab el-Mandeb Strait if the conflict in the Middle East escalates, a scenario that would slash oil supplies to an already deeply disrupted market.
The Bab el-Mandeb is one of the world’s key trade chokepoints, connecting the Red Sea to the Gulf of Aden and Arabian Sea. It has acted as crucial relief valve for the oil market as exports through the Strait of Hormuz have plunged due to Iranian attacks on tanker and cargo ships.
Saudi Arabia surged oil flows through its East-West pipeline after Hormuz closed, redirecting millions of barrels per day to the Red Sea. Those barrels are transiting the Bab el-Mandeb to Asia, which has helped offset some of the lost supply to key economies like Japan and South Korea.
Oil and product exports through the Bab el-Mandeb nearly doubled to 7.2 million barrels per day in April compared to 3.9 million bpd in February before the U.S. and Israel attacked Iran, according to data provided by Kpler.
Iran’s Revolutionary Guard threatened Monday to close the Bab el-Mandeb if Israel did not halt strikes in Gaza and Lebanon, according to the state news agency Tasnim. Tehran has insisted that any peace deal with the U.S. must include the withdrawal of Israel from Lebanon.
Iran closing the Bab el-Mandeb would cut off the Saudi barrels that are heading to Asia, said Matt Smith, director of commodity research at Kpler.
“That would be a step up in terms of escalation and in terms of market impact,” Smith said. The flow of oil through the Red Sea is one of the factors that has kept crude prices from surging higher, he said.
U.S. crude oil prices spiked 8% at the session high Monday after Iran’s threat against Bab el-Mandeb. Prices pulled back after Israel and Lebanon agreed Wednesday to implement a ceasefire, but it is far from certain the truce will actually take effect.
Iran’s Lebanese ally Hezbollah, which acts independently from the government in Beirut, rejected the ceasefire deal Thursday. Israeli Prime Minister Benjamin Netanyahu told CNBC on Wednesday that “we have to disarm Hezbollah and we have to demilitarize Lebanon.”
The ceasefire between the U.S. and Iran remains fragile. Washington and Tehran exchanged fire in and around the Strait of Hormuz earlier this week. If the U.S. escalates military action, Iran’s natural response would be to target Bab el-Mandeb, Smith said.
Iran’s Houthi allies in Yemen have largely stayed out of the war so far. The Houthis attacked commercial ships in the Red Sea from 2023 through 2025 in retaliation for Israel’s war in Gaza. Traffic through the Bab el-Mandeb plunged and has never fully recovered.
The Trump administration waged a 52-day air war against the Houthis that ended in May 2025 with a ceasefire. The U.S. stopped its strikes in exchange for the militants ending their attacks on U.S.-flagged ships in the Red Sea.
The Houthis may be waiting to enter the current conflict until the Iranian leadership decides its advantageous to open another front, said Jack Kennedy, head of Middle East country risk at S&P Global Market Intelligence.
The Houthis wouldn’t have to do much to cut traffic through the Bab el-Mandeb, Smith said.
“They wouldn’t have to fire at every single tanker that was passing through there,” the Kpler analyst said. “Some specific targets would be enough to start deterring the passage through there.”
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