Houthis seize Yemen port, raising threat to oil and shipping

The Iran-backed Houthi militant group has seized control of Yemen’s port city of Mokha on the Red Sea coast, bringing Tehran closer to securing another point of leverage in its six-month-long conflict with the U.S.

The Houthis’ capture of Mokha is regarded as a severe setback to Saudi Arabia and the Yemeni forces it backs. It could also increase Iranian pressure around two critically important oil choke points on either side of the Arabian Peninsula: the Bab el-Mandeb Strait and the Strait of Hormuz.

The Houthis seized control of the city on Yemen’s Red Sea coast on Thursday, according to The Associated Press, citing Yemeni and Houthi officials. CNBC could not independently confirm the report.

Mokha, a strategic city on Yemen’s Red Sea coast that gave its name to Mocha coffee, is situated about 75 kilometers (46 miles) north of the Bab el-Mandeb Strait, a waterway that connects the Red Sea to the Gulf of Aden and to global markets.

The strategic importance of the Bab el-Mandeb Strait has grown significantly since the start of the U.S. and Israel’s war against Iran in late February, with the waterway emerging as an alternative route for crude moving toward Asia.

It is now feared that the Houthis’ advance toward the Bab el-Mandeb Strait could have major ramifications for global trade, particularly if the militant group ratchets up threats or attacks on Red Sea shipping.

The capture of Mokha represents a “major blow” to Saudi Arabia as it raises the possibility of the group exerting a tighter grip on the Bab el-Mandeb Strait, according to Hamish Kinnear, principal Middle East and North Africa analyst at risk intelligence company Verisk Maplecroft.

“The Houthis were already threatening Saudi shipping from previous positions, but their capture of Mocha opens up the possibility of further advances towards the Bab el-Mandeb coastline and a tighter grip on the chokepoint,” Kinnear said in a research note.

As the war continues, Kinnear said both Tehran and Washington believe time is on their side, making a new truce unlikely for now.

“Oil and gas prices, and more specifically refined products such as diesel, will continue to tick upwards while that remains the case – even if US convoys and Strait of Hormuz export alternatives cushion the price impact,” Kinnear said.

International benchmark Brent crude futures with November expiry traded 2.1%…