Houthi seizure of Yemeni port pushes US diesel past $6 a gallon for first time

Houthi fighters seized the Red Sea port city of Mocha on Yemen’s west coast on Thursday, taking it from forces loyal to Yemen’s internationally recognized government and gaining a stronger position over one of the world’s most important shipping chokepoints.

Government forces carried out what was described as a tactical withdrawal after being overwhelmed, regrouping south toward the town of Dhubab, according to Al Jazeera. The Houthis’ advance threatens to cut off road access to the city of Taiz and puts them closer to controlling both shores of the Bab el-Mandeb Strait, the narrow waterway connecting the Red Sea to the Gulf of Aden.

Security analyst Wolfgang Pusztai told Al Jazeera that control of the strait, roughly 29 kilometers wide at its narrowest point, would let the Houthis threaten shipping without needing missiles or drones: “they could control it just with artillery; they wouldn’t need to even use missiles or drones to attack ships.” Rashad al-Alimi, head of Yemen’s internationally recognized Presidential Leadership Council, warned that “Bab al-Mandeb cannot become another Strait of Hormuz” and called for decisive international intervention.

The advance comes seven months into a war that began after US and Israeli forces struck Iran on February 28, prompting Iran to move to close the Strait of Hormuz, the primary route for Gulf oil and liquefied natural gas exports, to commercial shipping within 48 hours. The strait normally carries about 85 ship transits a day and roughly a fifth of the world’s oil and gas supply; as of last week only six ships had transited it in a day, according to Al Jazeera. That disruption pushed more tanker traffic toward the Bab el-Mandeb route now under growing Houthi pressure.

Saudi Arabia told OPEC that its crude output fell by 1.9 million barrels a day to 6.238 million barrels a day in August, the kingdom’s lowest production level since 1990, as the regional conflict squeezed export routes and pushed tanker insurance rates to records, according to Bloomberg. Saudi crude exports fell by roughly a third in August to about 3 million barrels a day, Bloomberg reported. Brent crude settled 6.3% higher at $107.63 a barrel on Thursday.

The disruption has reached US pumps. The national average price of diesel hit $6.05 a gallon on Friday, an all-time high, while regular unleaded gasoline averaged $4.29 a gallon, according to NBC News. Diesel’s previous record, $5.82 a gallon, was set in June 2022. NBC News reported the current spike also reflects refineries knocked offline amid the Ukraine-Russia war and a Russian diesel export ban imposed in July after Ukrainian drone strikes on its refineries.

KPMG chief economist Diane Swonk said the cost of diesel “gets into just about everything” as it works through the shipping and trucking sectors, calling it an “inflationary problem” likely to persist for months. RSM chief economist Joseph Brusuelas said “consumers should be prepared to pay higher inflation for anything that requires being shipped.”

Yemen’s government-aligned officials have described the Houthis as one of Iran’s regional partners, alongside Hezbollah in Lebanon. The Houthis have controlled Yemen’s capital, Sanaa, and much of the country’s north since 2014, while the internationally recognized government has operated from the southern city of Aden.