Iran’s retaliatory measures following the airstrikes launched by the US and Israel earlier this year brought a long-dreaded scenario to life: Tehran, much to the dismay of many, did go ahead and implement the closure of the Strait of Hormuz – a high-stakes decision that every administration in the US has dreaded since the 1979 revolution.

Energy markets, particularly across the Indo-Pacific region, have been unsettled. Now, Pro-Iranian Houthis are ensuring that Bab-el-Mandeb Strait emerges as the other major sticking point.

Hormuz Muddle

Strait of Hormuz, the singular maritime chokepoint from the Persian Gulf, carries roughly 25% of global seaborne oil and nearly 20% of global liquefied natural gas (LNG). Hormuz is deep enough and wide enough to handle the world's largest crude oil tankers, and it is one of the world's most important oil chokepoints. 

In the fourth quarter of 2025, it recorded 20.7 million barrels per day (bpd) of oil flows, including 15.2 million bpd of crude oil and condensate, and 5.5 million bpd of petroleum products, according to the US-based Energy Information Administration (EIA).

Gulf countries, as well as Iraq, were heavily dependent on this strait for the export of crude oil by sea, before the conflict unfolded.

Hormuz is also an important route for container traffic for the import and export of goods from the region.

Uncertainty Due To Hormuz Crisis

The US and Israel underestimated Iran: Tehran, driven by a sense of unity among its stakeholders, reckoned that the prolonged disruptions along the Strait of Hormuz, even after the memorandum of understanding (MoU) with the Trump administration, could eventually ensure a better peace deal. The move will also compel the international community, including crude and LNG-producing Gulf States and their clients dependent on the Strait, to convince the Trump administration to make concessions to Tehran.

Simultaneously, Iran realised that it can monetise the situation.

Iran announced the formation of the Persian Gulf Strait Authority (PGSA) as a dedicated regulatory body, managed through its Supreme National Security Council, to oversee maritime traffic, operations, and potential transit fees in the Strait of Hormuz. This authority enforces strict clearance protocols, requiring transiting commercial vessels to submit detailed operational and cargo disclosures.

The final US-Iran peace deal may even lead to Tehran having rights to collect transit fees in the Strait of Hormuz.  

Bab el-Mandeb Strait

The Bab el-Mandeb Strait is another chokepoint caught in the energy crossfire. Located between the Horn of Africa and the Middle East, connecting the Red Sea to the Gulf of Aden and Arabian Sea, it facilitates about 12% of global trade and a quarter of global container traffic. Oil flows through the strait averaged 9.3 million bpd in 2023, before the Houthi rebels' tanker campaign cut that to about 4.1 million bpd in 2024 and 4.2 million bpd in the first half of 2025, according to the EIA. The oil flow scaled to about 7.4 million bpd in June, according to Kpler.

Disruptions at Bab el-Mandeb force ships around Africa's Cape of Good Hope, adding 10–14 days transit time and surging freight and insurance costs. Exporters such as Saudi Arabia use Red Sea pipelines to bypass Hormuz, but that oil must still safely pass through Bab el-Mandeb to reach international markets.

Economic Woes

Stability in Yemen has been imperative for the stability of Saudi Arabia. Riyadh has been sensitive to Iranian proxies in Yemen given its historical rivalry with Iran. Tehran, on its part, has cultivated the Houthis, and the group has delivered to increase pain in the Bab el-Mandeb chokepoint in a clear message to Crown Prince Md Bin Salman and his moves to engage all sides, including the Trump administration, to keep Tehran under check. Even as it refrained from attacking Saudi Arabia after the initial few weeks of the war, Iran moved swiftly to create difficulties for the export of Gulf oil, including Saudi crude via Bab el-Mandeb. 

The economic distress inflicted on the Gulf via both chokepoints will not only compel the monarchies to seek an arrangement with Iran but may also compel them to convince Trump to enter into an early settlement with Tehran. Repeated attacks on Kuwait and Bahrain have further worsened the woes for these monarchies as well as their security guarantor, the US.        

Tensions in the maritime chokepoints in the Gulf have forced the detour around South Africa, adding 4,000-6,000 nautical miles, close to 30 extra days at sea, and additional costs.

Even as the oil-rich Gulf states expedite alternative methods to transport their biggest asset, prudence demands that Gulf States enter into an arrangement and create a regional architecture that creates deterrence as well as keeps the oil flowing, including from Iran.  

(The writer is a commentator on geopolitics and geoeconomics. Views expressed are personal.)