As the armed conflict between the United States and Iran intensifies and the Red Sea faces the risk of a blockade, reports have emerged that Iran recently delivered senior military personnel, weapons, and gold to Yemen's Houthi rebels. The move is interpreted as preparatory work to strengthen the capabilities of the pro-Iran Houthis and threaten the Red Sea shipping route. Muammar al-Eryani, information minister of the Saudi-backed Yemeni government, told Reuters that "their (IRGC) mission is to strengthen the militia's military capabilities and prepare them to threaten international maritime security in the Red Sea and the Bab el-Mandeb Strait."
With growing concerns that the Red Sea could be blockaded following the Strait of Hormuz, international oil prices surged across the board. Brent crude topped $100 for the first time in two months, and there were even forecasts that it could approach $120 in the fourth quarter.
"Loaded Mid-Range Missiles and Drone Parts"... Iran Says "Funeral Mourners"
On the 23rd, Reuters, citing four sources, reported that Iran transported IRGC (Islamic Revolutionary Guard Corps) commanders, military advisers, and missile and drone-related equipment to Yemen on a flight from Tehran to Yemen on the 13th.
Sources said the flight carried 10 to 21 IRGC personnel, including senior commanders. One source added that "the IRGC commanders were dispatched to support Houthi operations and provide training on the new missile system," and that "Iran also sent gold by aircraft to fund the Houthis' activities."
Mujahed al-Salloom, a security and intelligence analyst who has tracked the Houthis and other Iran-backed groups for years, explained that the cargo included short- and mid-range missiles and drone-related parts, similar to the weapons used in past attacks on Saudi Arabia and the United Arab Emirates (UAE).
The aircraft is known to have traveled from Yemen to Iran carrying about 200 people seeking to attend the funeral of late former Iranian Supreme Leader Ali Khamenei. As it returned to Yemen on the 13th, Iran loaded personnel and supplies for the Yemeni rebels. In response, Iranian Foreign Ministry spokesman Esmail Baghaei drew a line under the allegations, saying, "We repatriated the Houthi delegation that attended the funeral and Yemeni citizens who received treatment in Iran." Abdel Rahman al-Ahnomi, a Houthi media official who said he was aboard the aircraft, called this "false and fabricated," saying all passengers were civilians. The Houthis deny being an Iranian proxy and claim they develop weapons on their own.
Brent Crude Tops $100... "Could Reach $120 in Q4"
The Houthis, who declared a maritime blockade against Saudi Arabian vessels in the Red Sea, announced on the 23rd that they had carried out a military operation targeting two Saudi oil tankers attempting to pass through the Bab el-Mandeb Strait, a key gateway to the Red Sea. After Iran blockaded the Strait of Hormuz, Saudi Arabia has taken a detour route, moving crude oil westward through pipelines to export it via the Red Sea. Following the Houthi blockade, vessels of Saudi state-owned shipping company Bahri changed their routes toward the Suez Canal, but ships bound for Asia must go around the African continent. Moreover, Bloomberg noted that fully loaded very large crude carriers (VLCCs) have too deep a draft (the depth to which a ship sits in the water) to pass through the Suez Canal.
After the Saudi oil tanker attack, U.S. President Donald Trump said on the 23rd that he was "considering a large-scale attack" against Iran, "a bigger attack than ever before." In an interview with U.S. internet outlet Axios that day, Trump said, "I am on the verge of making a (attack) decision. We have completed all preparations." Axios reported that Trump's remarks meant an attack on a larger scale than the "Operation Grand Fury" full-scale war against Iran, rather than a limited airstrike.
The closing price of Brent crude, the benchmark for international oil prices, exceeded $100 a barrel on the 23rd for the first time in about two months. On the ICE Futures Exchange that day, September Brent crude futures closed at $100.69 a barrel, up 7.04% from the previous session. On the New York Mercantile Exchange, September U.S. West Texas Intermediate (WTI) crude futures also closed at $92.19 a barrel, up 6.17% from the previous session. Both crude grades extended their gains for a fifth consecutive trading session. Brent crude was at its highest level since May 22, and WTI since June 4.
If the Bab el-Mandeb Strait is blockaded following Hormuz, the Middle Eastern crude oil supply chain will inevitably suffer a serious blow. Experts estimate that the crude oil supply passing through the two straits accounts for about 25% of the global total. Goldman Sachs, in a report, forecast that if disruptions in the Bab el-Mandeb Strait continue, Brent crude could exceed $120 a barrel in the fourth quarter and average $100 next year. It also predicted that oil prices could rise further if the Bab el-Mandeb Strait and the Suez Canal are both blocked.
