As Iran’s president arrives in New Delhi for the BRICS summit, the Middle East’s energy crisis is spreading from the Strait of Hormuz to the Red Sea, threatening two of the world’s most important oil shipping corridors at the same time.
The global energy market is facing an increasingly dangerous scenario: two strategic maritime chokepoints connecting the world’s major oil-producing regions to global markets are now under severe pressure.
The Strait of Hormuz, through which a huge share of seaborne oil and petroleum trade normally passes, has already been disrupted by the escalating U.S.-Iran conflict. Now, thousands of kilometres to the southwest, Iran-aligned Houthi forces have seized Perim Island, also known as Mayyun, in Yemen’s Bab el-Mandeb Strait. Together, the developments have transformed what was already a Middle Eastern security crisis into a global energy problem.
And the timing could hardly be more significant. Iranian President Masoud Pezeshkian is in New Delhi for the BRICS summit, where energy security, sanctions, trade and the future of global finance are among the issues confronting the expanded bloc.
Hormuz: the world’s energy artery under pressure
The Strait of Hormuz is one of the most important oil chokepoints on Earth. It connects the Persian Gulf with the Gulf of Oman and the Arabian Sea, providing the principal maritime route for oil exports from major producers including Saudi Arabia, Iraq, Kuwait, Qatar and the United Arab Emirates.
The current conflict has severely disrupted that flow. Oil prices have already moved above $100 a barrel, reflecting fears that prolonged restrictions around Hormuz could remove significant volumes from international markets. The longer the disruption continues, the greater the pressure becomes on countries that rely heavily on Middle Eastern crude and liquefied natural gas.
For Asia, the stakes are particularly high. China, India, Japan and South Korea are among the world’s largest energy consumers, while much of their imported crude originates in the Gulf. That makes the security of the waterway not merely a Middle Eastern issue, but a direct concern for the global economy.
Then came Perim Island
The latest escalation has come from Yemen. Houthi forces have captured Perim Island, a small but strategically located volcanic island sitting inside the Bab el-Mandeb Strait. The island effectively divides the narrow waterway into two shipping channels.
The Houthis have also seized the nearby port city of Mokha and other areas along Yemen’s Red Sea coast, strengthening their position around one of the world’s major maritime gateways. The significance of Perim is far greater than its size.
Bab el-Mandeb connects the Red Sea to the Gulf of Aden and ultimately the Indian Ocean. Ships using the route can travel through the Suez Canal, providing a critical link between Asian and European markets. If that route becomes unsafe, ships may have to take the much longer journey around the Cape of Good Hope in southern Africa. That adds thousands of kilometres to voyages, increasing fuel consumption, insurance costs, shipping rates and delivery times.
Why this matters for oil
The two chokepoints are strategically connected. The Strait of Hormuz threatens oil leaving the Persian Gulf. Bab el-Mandeb threatens the alternative route connecting the Gulf region with the Red Sea and Suez. That creates a dangerous situation for oil producers and consumers alike.
According to Euronews, Hormuz and Bab el-Mandeb together account for more than a quarter of seaborne crude oil and petroleum trade. The Red Sea is also a major artery for container shipping between Asia and Europe. Saudi Arabia is particularly exposed.
Riyadh has increasingly relied on routes that avoid Hormuz, including its East-West pipeline across the kingdom, which can move crude toward the Red Sea. But a drone attack has now forced Saudi Arabia to shut that pipeline, further restricting its ability to move oil around the affected maritime routes. The result is a potentially dangerous chain reaction:
Hormuz disruption → Gulf exports become harder to move → Saudi Arabia seeks alternative routes → Bab el-Mandeb becomes threatened → alternative Red Sea routes become less reliable → global supply fears intensify.
Oil prices are already responding
Energy markets are reacting before the full consequences of the disruption are known. Brent crude has moved above $100 a barrel as traders price in the possibility of prolonged supply shortages and higher transportation costs. Prices have subsequently fluctuated as markets assess whether the disruption will become permanent or whether alternative supplies can compensate.
The economic consequences could spread quickly. Higher crude prices raise the cost of transportation, aviation, manufacturing, electricity and petrochemical products. That can push inflation higher at a time when central banks are already trying to control price pressures.
For developing economies that import most of their energy, the consequences could be even more severe. India, for example, imports a large proportion of the crude oil it consumes. Any prolonged increase in global oil prices could therefore translate into higher fuel costs, a wider import bill and renewed inflationary pressure.
Iran’s role — and the BRICS backdrop
Against this backdrop, Iranian President Masoud Pezeshkian’s presence in New Delhi carries enormous geopolitical significance. Iran is attending the BRICS summit while its conflict with the United States and Israel is simultaneously disrupting global energy markets.
On Friday, Pezeshkian held talks with Indian Prime Minister Narendra Modi. Modi stressed the need to protect freedom of navigation, maritime commerce and the safety of seafarers — a particularly significant message given the crisis surrounding Hormuz and Bab el-Mandeb.
Pezeshkian, meanwhile, has pushed for greater use of national currencies in trade among BRICS members and reduced dependence on Western financial mechanisms. That gives the New Delhi summit an unusual backdrop.
BRICS is discussing how emerging economies can reduce their exposure to Western-dominated financial systems at precisely the moment when a major conflict is demonstrating how vulnerable global trade remains to geopolitical disruptions.
Could this become a wider energy crisis?
That is the central question. The capture of Perim Island does not automatically mean that every ship passing through Bab el-Mandeb will be attacked or that global oil supplies will suddenly collapse.
The Houthis have publicly said that international shipping is safe, while subsequently making clear that Saudi-linked vessels are an exception. The group has therefore left open the possibility of selective disruption rather than a blanket closure.
But markets do not need an actual blockade to react. The perception that ships could be attacked is enough to push up insurance premiums and force shipping companies to change routes. Hormuz already under pressure, the world has fewer safe alternatives.
A crisis that reaches far beyond the Middle East
The most worrying feature of the current situation is the possibility that separate regional conflicts could reinforce one another. Iran’s confrontation with the United States is disrupting Hormuz. The Houthis’ advance is threatening Bab el-Mandeb. Saudi Arabia’s oil infrastructure has been attacked. Shipping companies are reconsidering routes. Oil prices are rising.
At the same time, leaders from Iran, Russia, China and other major emerging economies are sitting in New Delhi attempting to strengthen economic cooperation and discuss a changing global order. The Strait of Hormuz and Bab el-Mandeb may be thousands of kilometres apart, but economically they are part of the same system.
If both remain unstable, the consequences could move from higher oil prices to higher inflation, more expensive shipping and slower global growth. And that makes the BRICS summit in New Delhi more than a diplomatic gathering. It has become a meeting taking place in the shadow of a global energy crisis — one in which the security of two narrow waterways could help determine the price of oil, the cost of trade and the direction of the world economy.