Bab al-Mandab closed: Europe bears the cost, oil shrugs it off
Yemen has closed Bab al-Mandab. Europe's supply chain stretches by a month, yet oil ignores the blockade. An analysis of the real impact.
English · Original discussion in Spanish · Published
Bab al-Mandab closed: Europe pays the price while oil doesn't even notice
Yemen has once again closed the Bab al-Mandab strait. It is not the first time: since October 2023 the Houthis have kept the passage semi-blocked under the pretext of attacking Israeli interests. What is new is that there is now talk of a "total" blockade on traffic bound for Israel, but the ripple effect is hitting all of Europe.
The supply chain between Asia and the continent has already lengthened by an average of one month. Ships that used to cross the Suez now round Africa, adding thousands of kilometres and weeks of delay. Freight costs have skyrocketed, but there is one figure that baffles analysts: oil is not reacting. It is not rising by double digits, as might be expected from a closure on one of the key energy routes.
The reason, some analyses suggest, is that crude from the Persian Gulf does not depend on Bab al-Mandab to reach Asia, its main market. And the crude heading West is already constrained by Hormuz. "It's rain on wet ground," they sum up. The blow falls on general cargo, not on barrels. Meanwhile, the blockade is presented as a measure against Israel, but the ones really suffering are European traders.
Related discussions in the forum
Yemen has once again closed the Bab al-Mandab strait. It is not the first time: since October 2023 the Houthis have kept the passage semi-blocked under the pretext of attacking Israeli interests. What is new is that there is now talk of a "total" blockade on traffic bound for Israel, but the ripple effect is hitting all of Europe.
The supply chain between Asia and the continent has already lengthened by an average of one month. Ships that used to cross the Suez now round Africa, adding thousands of kilometres and weeks of delay. Freight costs have skyrocketed, but there is one figure that baffles analysts: oil is not reacting. It is not rising by double digits, as might be expected from a closure on one of the key energy routes.
The reason, some analyses suggest, is that crude from the Persian Gulf does not depend on Bab al-Mandab to reach Asia, its main market. And the crude heading West is already constrained by Hormuz. "It's rain on wet ground," they sum up. The blow falls on general cargo, not on barrels. Meanwhile, the blockade is presented as a measure against Israel, but the ones really suffering are European traders.
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Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (63 replies).
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