Iran and the Houthis Could Redraw the Global Energy Map

The world is discovering that Iran and the Houthis do not need to control the world’s oil fields to exercise enormous influence over the global economy; they only need to control, or constrain access to, the narrow waterways through which that oil must pass.

Salman Rafi Sheikh

A War That Has Reached the Energy Arteries

The Strait of Hormuz has become the central economic pressure point of the US-Israel war with Iran. Commercial traffic through the waterway has been severely reduced, while the conflict has pushed oil prices higher and injected a new risk premium into global energy markets. The significance of Hormuz is straightforward: it is the principal maritime gateway for oil and gas exports from the Persian Gulf. But the story is no longer confined to Hormuz.

That creates a paradox for the United States and its regional partners. The more they seek to resolve the region’s political conflicts through military superiority, the more incentive their opponents have to exploit the few areas where geography gives them an advantage

Thousands of kilometres away, the Yemeni Houthis are consolidating their position along the Red Sea coast. Their presence around the Bab al-Mandab Strait gives them growing influence over another of the world’s most important maritime chokepoints. If that position develops into sustained control over maritime access, the consequences will extend well beyond Yemen. This should not be understood simply as Iran and the Houthis disrupting an otherwise stable international energy system. Their growing leverage is a consequence of a much wider regional conflict imposed on them by the US and its allies in the region.

The Houthis began their Red Sea campaign in late 2023, explicitly connecting their actions to Israel’s war in Gaza. Their operations subsequently led major shipping companies to reroute vessels around the Cape of Good Hope, adding thousands of kilometres and substantial costs to journeys between Asia and Europe. The current US military confrontation with Iran has added another dimension. As the United States and Israel have taken the conflict directly into Iranian territory, Tehran has sought ways to impose costs beyond the immediate battlefield. Iran’s geographical position gives it an obvious source of leverage: the Strait of Hormuz. The same logic applies to Houthis. Their position beside Bab al-Mandab—and their alliance with Iran—gives them an opportunity to influence one of the principal maritime routes linking the Indian Ocean, the Red Sea, and the Mediterranean. In both cases, geography is becoming an instrument of resistance.

Geography as Asymmetric Power

The extraordinary significance of the present moment lies in the geography of the Middle East. Iran sits beside Hormuz. The Houthis operate along the approaches to Bab al-Mandab. Neither needs to possess the world’s largest navy or largest oil reserves to exercise influence over global energy flows. Their geographical positions provide a form of asymmetric power that cannot easily be neutralized through conventional military superiority. Geography, in simple words, cannot be just undone.

The United States can deploy aircraft carriers, fighter aircraft, and missile-defence systems. Israel can conduct long-range military operations. Saudi Arabia and the UAE possess enormous financial resources and sophisticated Western-supplied weapons. Iran and the Houthis cannot compete with these capabilities on equal terms. But they do not need to. Iran can use its position beside Hormuz to influence the maritime artery through which Gulf energy reaches global markets. The Houthis can use their position around Bab al-Mandab to influence the southern gateway to the Red Sea. The result is a striking reversal of conventional power. The countries with the greatest military capabilities do not necessarily have complete control over the economic consequences of war. A geographically well-positioned actor can exercise considerable leverage over a much larger economy.

This is why Bab al-Mandab matters so much. The US Energy Information Administration identifies it as one of the world’s major oil transit chokepoints. Earlier Houthi operations in the Red Sea have already caused major changes in the movement of petroleum products through the region. The possibility of simultaneous constraints around Hormuz and Bab al-Mandab takes this dynamic to another level.

If traffic through Hormuz remains severely constrained while access through Bab al-Mandab becomes increasingly difficult, the global energy market will have fewer inexpensive alternatives. Ships can travel around Africa, but the additional distance increases fuel consumption, insurance, and freight costs and lengthens delivery times. The issue, therefore, is not whether the world’s oil physically disappears. It is whether oil can continue moving through the global economy at the same speed and cost as before. That distinction is crucial. Iran and the Houthis possess something that conventional measures of military and economic power fail to capture: the ability to influence the geography of global energy flows.

The Limits of Military Dominance

There is a deeper irony in the emerging energy crisis. For decades, Gulf security has rested heavily on American military power. Saudi Arabia and other Gulf monarchies have maintained close security relationships with Washington while viewing Iran as a principal regional rival. Saudi Arabia and the UAE also participated in the military campaign against the Houthis in Yemen. Yet the current conflict is demonstrating the limitations of this security architecture. Military power can protect individual vessels. It can destroy missile systems and military installations. It can deploy additional forces around strategic waterways. But it cannot change geography. As long as Iran remains beside Hormuz and the Houthis retain their position around Bab al-Mandab, both will possess forms of leverage that cannot simply be eliminated through military action.

This is ultimately a political problem, not merely a military one. The more the region relies on force to settle political disputes, the more valuable geography becomes for actors that cannot compete conventionally. Iran does not need to defeat the United States militarily to demonstrate that the costs of attacking it will extend into the global economy. The Houthis do not need to match the military capabilities of Israel or the Gulf states to make Yemen’s strategic location relevant to the wider world. Their leverage derives precisely from asymmetry.

This also explains why the energy consequences of the conflict may ultimately extend far beyond the countries directly involved. Asian importers, European consumers, and even Gulf producers can find themselves paying higher prices for a war they may not have directly initiated. That creates a paradox for the United States and its regional partners. The more they seek to resolve the region’s political conflicts through military superiority, the more incentive their opponents have to exploit the few areas where geography gives them an advantage.

The longer the confrontation continues, therefore, the less useful it becomes to think of Hormuz and Bab al-Mandab merely as shipping routes. They are becoming bargaining spaces. And that could fundamentally change the geopolitics of energy. For decades, the central question in the Middle East was who controlled the oil. The emerging question is more consequential: Who has the power to determine how, when, and at what cost that oil reaches the world?

Salman Rafi Sheikh, research analyst of international relations and Pakistan’s foreign and domestic affairs