IMF projects Yemen conflict may disrupt global oil supply
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The International Monetary Fund (IMF) projects that escalating conflict in Yemen could disrupt oil shipments through the Bab al-Mandeb strait, potentially worsening the global energy crisis. The warning comes as Houthi forces threaten to block the strategic waterway, through which an estimated 6.2 million barrels of oil pass daily. Even as diplomatic efforts continue, the risk of supply disruption remains high.
The Threat to Bab al-Mandeb
The IMF assessment highlights the vulnerability of the Bab al-Mandeb strait, a chokepoint between Yemen and Djibouti that handles roughly 10% of global seaborne oil trade. Houthi leaders have repeatedly threatened to target vessels if the Saudi-led coalition continues airstrikes. In 2018, a similar Houthi blockade attempt led to a 20% spike in oil prices within two weeks, according to the IMF.
Global Energy Market Impact
A sustained disruption could push oil prices above $150 per barrel, the IMF projects, compounding inflationary pressures already felt worldwide. The United States and European Union have urged restraint, with the U.S. Navy's Fifth Fleet on alert in the region. Alternative routes, such as the Cape of Good Hope, would add 10-15 days to shipping times and raise costs significantly.
What's Next
The UN Security Council is set to discuss the Yemen situation on July 20. It remains unclear whether Houthi threats will materialize or if diplomatic channels can de-escalate tensions before supply chains are affected.
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IMF projects Yemen conflict may disrupt global oil supply
