Houthis Seek Control of Bab el-Mandeb – New Threat to Oil Prices

Houthis Advance on Strategic Strait

The Houthi movement in Yemen is actively working to establish full control over the Bab el-Mandeb strait, according to Yemen's information minister, as reported by OilPrice.com. The militia is said to be expanding its presence along Yemen's western coast with the aim of dominating the strategically vital waterway.

Bab el-Mandeb is a narrow passage between Yemen and Djibouti connecting the Red Sea to the Gulf of Aden. Each day, enormous volumes of the world's oil shipments and container tonnage pass through this chokepoint.

A complete Houthi grip on Bab el-Mandeb would not only hit oil prices — it would send shockwaves through the entire global goods trade.

What Is Bab el-Mandeb?

An Already Strained Trade Route

Since 2023, the Houthis have systematically attacked commercial vessels in the Red Sea, and major shipping companies have for extended periods chosen costly alternative routes rather than risk passage. Any further military consolidation of the strait could sharply worsen the situation.

The information minister of the Yemeni government opposed to the Houthis, as quoted by OilPrice.com, describes this as a deliberate strategy to establish physical control over one of the planet's most sensitive maritime points. The claims have not been independently verified, but they are consistent with military observations from recent months.

Oil Prices and Market Reactions

Geopolitical unrest around key oil corridors has in 2026 proven to have rapid and powerful effects on commodity markets. Following the American and Israeli military strikes against Iran on February 28, 2026, crude oil prices surged by up to 30 percent in a single trading day, surpassing $120 per barrel, according to market data cited in research materials.

A potential Houthi dominance over Bab el-Mandeb could permanently embed a risk premium into oil prices, as every tanker bound for the Suez Canal must pass through this strait. Norwegian oil stocks on the Oslo Stock Exchange, as well as Equinor as a major exporter, would be among the first to reflect any changes in crude oil prices.

Crypto Markets Track Oil's Swings

A growing connection is emerging between oil price shocks and cryptocurrency markets — albeit an indirect one, driven by risk sentiment and inflation fears rather than any direct structural link. When oil prices climbed sharply in the wake of the Hormuz crisis earlier in 2026, Bitcoin fell from near $74,000 to around $65,000–$66,000, and over 94,000 traders were liquidated within 24 hours with total losses of $364 million, according to Binance Research.

"Bitcoin and oil are becoming more tightly intertwined as a result of geopolitical uncertainty," said Oz Sultan of Sultan Interactive Group as recently as August 2026. He notes that a new oil price spike could put pressure on crypto markets, even if the correlation is not stable over time.

Binance Research concluded in March 2026 that there is no stable long-term return correlation between Bitcoin and oil, but that oil price shocks amplify short-term volatility in crypto markets.

What Happens Next?

Market participants are now closely watching whether the Houthis can actually consolidate their position along Yemen's western coast. A military escalation — or international countermeasures — could quickly feed through to oil prices. For Norwegian investors and shipping companies, the developments are particularly relevant: Norwegian shipping firms have already been adjusting their routes to avoid the Red Sea for some time.

The situation in Yemen is complex, and claims from one party to the conflict should be weighed with caution. Nevertheless, any change in control at Bab el-Mandeb represents a potentially market-moving event in 2026.