The jump in oil prices followed another round of intense exchanges between American and Iranian forces.
The United States reportedly struck Iranian coastal defense systems and missile installations after reimposing a naval blockade around Iranian ports. Tehran answered with a barrage of missiles and drones aimed at U.S. military facilities across the region, including a recently expanded American air base in Jordan.
As military operations intensified, new concerns emerged that Iran could expand the conflict beyond the Persian Gulf by activating its proxy network in Yemen.
According to Reuters, three sources familiar with the matter said Iran has instructed the Houthi movement to stand ready to block the Bab el-Mandeb Strait if the United States attacks Iranian electrical infrastructure.
Such a move would place another critical global energy route at risk while significantly increasing pressure on international supply chains.
“Simultaneous disruptions affecting Hormuz and Bab el-Mandeb would significantly amplify supply chain stress, increase tanker availability constraints, and raise insurance premiums,” said Wael Makarem, financial markets strategist lead at Exness.
The Bab el-Mandeb Strait has become increasingly important to global oil transportation. According to Kpler data, roughly 7.4 million barrels of petroleum moved through the passage each day in June, representing approximately 7% of worldwide oil production. That marks a sharp increase from the 4.2 million barrels transported daily just one year earlier.
Any prolonged disruption would force tankers onto longer and more expensive routes while driving shipping costs and insurance premiums sharply higher.
Reuters reported that discussions about using the Bab el-Mandeb as leverage have taken place among senior Iranian leaders. Two senior Iranian officials and a regional source familiar with the conversations said the proposal has been actively discussed within the Islamic Republic’s leadership.
The sources, who requested anonymity, said Iran recently delivered the message to its Houthi partners. However, they did not specify exactly how the communication occurred or whether it came after President Trump’s warning on Tuesday that Iranian power infrastructure could become a military target.
One source close to the Houthis claimed the group has already positioned missiles and drones near Bab el-Mandeb, including locations overlooking Hodeidah and the Gulf of Aden.
According to the source, the forces have completed their preparations and are simply waiting for orders to begin operations against commercial shipping.
Neither Iran’s Foreign Ministry nor a Houthi spokesman immediately responded to Reuters’ requests for comment regarding the report.
Iranian negotiator Mohammad Baqer Qalibaf underscored Tehran’s position by declaring that the country is engaged in an “existential war” with the United States. He further argued that Iran’s national security depends on maintaining control over the Strait of Hormuz.
His remarks reinforce what many security analysts have warned for years—that Tehran views strategic maritime chokepoints as powerful leverage in any confrontation with the West.
The regional instability spread beyond Iran and Yemen on Thursday when operations at Iraq’s Basra oil export terminal were briefly interrupted after a drone struck an oil tanker, according to four Iraqi oil and security officials.
Although the drone did not ignite a fire or inflict significant damage, loading operations were temporarily halted while authorities assessed the situation. Iraqi officials later confirmed that exports resumed after the brief interruption.
Ali Nazar, head of Iraq’s state oil marketer SOMO, downplayed the incident.
“It is not targeting Basra Oil Terminal. Its target is another place. Loading is at normal rates depending on the vessels’ availability,” Ali Nazar told Reuters.
While President Trump recently welcomed Iran’s release of an American citizen as a “gesture of goodwill,” developments on the ground paint a far different picture. Iran continues launching attacks against U.S. interests and regional allies while threatening to disrupt some of the world’s most important energy corridors through its network of proxy forces.
As investors closely monitor every new military development, global energy markets are already pricing in the possibility that the conflict could spread even further. With both the Strait of Hormuz and the Bab el-Mandeb Strait now under renewed scrutiny, traders fear that additional escalation could send oil prices even higher and place even greater strain on global supply chains.
