1. Get audio access with any FP subscription.

   Subscribe Now

   ALREADY AN FP SUBSCRIBER? LOGIN

The cease-fire and memorandum of understanding between the United States and Iran are clearly over. On Tuesday, U.S. Central Command restarted its blockade of all Iranian shipping and ports, which comes after three days of U.S. airstrikes in reprisal for Iranian attacks on shipping in the Persian Gulf. 

The thing to keep an eye on, though, is the belated entry into the wider war of the Houthis, a designated terrorist group that runs much of Yemen and has terrorized the Red Sea for years. The Houthis’ entry into the conflict, which was announced on Tuesday with ominous threats (and reprisal strikes on neighboring Saudi Arabia), turns a war that Trump is already struggling to manage into a potentially even wider conflict, with nasty implications for world trade and oil prices. 

The cease-fire and memorandum of understanding between the United States and Iran are clearly over. On Tuesday, U.S. Central Command restarted its blockade of all Iranian shipping and ports, which comes after three days of U.S. airstrikes in reprisal for Iranian attacks on shipping in the Persian Gulf. 

The thing to keep an eye on, though, is the belated entry into the wider war of the Houthis, a designated terrorist group that runs much of Yemen and has terrorized the Red Sea for years. The Houthis’ entry into the conflict, which was announced on Tuesday with ominous threats (and reprisal strikes on neighboring Saudi Arabia), turns a war that Trump is already struggling to manage into a potentially even wider conflict, with nasty implications for world trade and oil prices. 

Benchmark oil prices jumped to $85 a barrel, after a brief respite earlier this summer when the war seemed to be over. Shipping traffic in the Strait of Hormuz, which never entirely recovered from the U.S.-Iran war, collapsed again in the wake of renewed hostilities. On Monday, less than a score of ships crossed the strait. 

Now, there’s a new strait in the crosshairs.

The Houthis’ entry into the war, after four years of tenuous peace with Saudi Arabia, renews the threat to another vital shipping lane: the Bab el-Mandeb Strait, which is the narrow bit at the entrance to the Red Sea and the Suez Canal. The Houthis already closed down shipping in the area once, practically for good, in the wake of the Israel-Hamas war that began in 2023. Experts fear that may be about to happen again.

“I believe we may soon witness an unprecedented escalation” in the absence of mediation efforts by either Gulf neighbors or the United Nations, said Maged al-Madhaji, the chairman and co-founder of the Sana’a Center for Strategic Studies, a think tank in Yemen. “The danger is not limited to a confrontation between Saudi Arabia and the Houthis. It also includes the possibility of Yemen once again becoming a front in the wider regional confrontation.”

The reason that all the straits are getting so much attention is because Washington has made them the focus of the war and its messy aftermath. On Monday, U.S. President Donald Trump mooted the idea of setting up his own toll booth in the Strait of Hormuz and charging a 20 percent fee on all cargo—an idea neatly contradicted last month by his own secretary of state and which played into Tehran’s narrative of its own plans for control of the strait. Less than 24 hours later, Trump nixed the idea after claiming to have secured a massive investment pledge from Persian Gulf countries.

The threat of another vital chokepoint coming under fire is one reason that oil prices are rising again. The Suez Canal (the Mediterranean exit from the Red Sea) handles about half the oil and natural gas trade that Hormuz does, but that is still a big number: It’s nearly 10 percent of all seaborne oil and gas flows in the world.

And the Houthi threat to the Bab el-Mandeb Strait, so far held in abeyance during this latest war, is particularly troubling because some countries, such as Saudi Arabia and the United Arab Emirates, had figured out workarounds to Hormuz to get their oil to global markets. The Saudis shipped nearly half their oil on the East-West pipeline to the Red Sea, and the UAE did a bypass out to nearly the Indian Ocean. Those both sidestepped the threat of attacks from Iranian drones and missiles but walked right into the latent threat of Houthi projectiles. 

The safety valve for the Hormuz crisis just got gummed up.

But it’s not just about chokepoints, shipping, or which group with guns goes after those ships. The escalation that has taken place in the last two days reflects a regional understanding of the outcome of the U.S.-Iran war that is, to say the least, at odds with how Trump or his U.S. Defense Department views things. 

“The Houthis, and the Axis [of Resistance] more broadly, appear to believe that the balance of power has shifted in their favor to an extent not seen before, based on their interpretation of the outcome of the Iranian-American agreement,” al-Madhaji said, referring to the Iran-backed constellation of proxy groups in the Middle East, including Hezbollah and Hamas. “They are therefore moving toward imposing new rules, if they see the timing as favorable.”

This post is part of FP’s ongoing coverage. Read more here.