Iran’s proxies using Yemen to compound war’s impact on oil prices

Escalating conflicts between Yemen’s Iran-backed Houthi rebels and Saudi Arabia, along with attacks by other Iranian proxy forces on Saudi infrastructure, are heightening threats to tanker traffic in the Middle East and driving up global fuel costs. This situation has persisted for over six months since the U.S. and Israel initiated their war on Iran. Direct clashes between the U.S. and Iran have significantly reduced shipping through the Strait of Hormuz, but tensions between the Houthis and Saudi Arabia, along with attacks on Saudi infrastructure by other Iran-backed groups, are also impacting global fuel supplies in the Red Sea. Before the war, about 30% of oil supplies reached global markets via the Persian Gulf and the Red Sea. The ongoing threats to shipping routes have pushed the price of Brent crude oil to a near four-month high of about $108 per barrel. A recent drone attack damaged Saudi Arabia’s East-West pipeline, which is crucial for exporting oil from the Red Sea ports, further exacerbating the situation. This pipeline, originally built during the Iran-Iraq War, allows Saudi Arabia to transport oil from the Persian Gulf to the Red Sea, where it can be shipped to Europe and Asia. QUESTION: How might the ongoing conflict in the Middle East and its impact on global oil prices influence the future of renewable energy development?