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Posted July 16, 2026 at 10:15 am
Brent rose above $85 as Tehran told the Houthis to prepare to shut Bab el-Mandeb if the US strikes Iranian power infrastructure.
Oil prices rose after Reuters reported Iran told Yemen’s Houthis to be ready to close the Bab el-Mandeb strait, a key gateway into the Red Sea.
Brent climbed 1.09% to $85.88 a barrel, while US crude (WTI) rose 1.12% to $80.49, as traders weighed the risk that shipping lanes, not oil fields, become the bottleneck. Reuters said Tehran framed the warning as a response if the US strikes Iranian power infrastructure, which would put Bab el-Mandeb in play as traffic through the Strait of Hormuz is already being squeezed. Data firm Kpler estimates 7.4 million barrels per day of petroleum moved through Bab el-Mandeb in June, and before the conflict Hormuz carried roughly a fifth of global oil and liquefied natural gas flows. Even if production is unchanged, threats to these routes can quickly raise war-risk insurance costs and absorb tanker capacity as ships reroute or wait, lifting the “delivered” cost of crude. Some extra Iraqi loadings may help at the margin, but they do not solve a shipping jam if multiple chokepoints look risky at once.
For markets: Bab el-Mandeb’s 7.4 million barrels a day turns oil into a logistics trade.
When a chokepoint threat hits, the market often reprices delivery risk faster than supply risk. The near-term impact tends to show up in prompt Brent contracts because cargoes due in the next few weeks can’t easily be rescheduled, while longer-dated barrels have time to find alternate routes or adjust flows. That’s why time spreads – the gap between near and later oil prices – typically widen and short-run volatility rises, even before there’s proof that global output has fallen. For refiners, shippers, and anyone exposed to near-term energy costs, the front end of the curve is usually where the stress concentrates.
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Originally Posted July 16, 2026 – Oil Prices Climb As Iran Signals A Red Sea Chokepoint
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