The reported contingency plan points to a conditional Houthi threat to one of the world's most important shipping lanes, raising risks for oil flows, freight costs and broader market sentiment.
Iran has reportedly directed Yemen's Houthis to prepare to shut the Bab el-Mandeb Strait if the U.S. strikes Iranian electricity infrastructure, in what Reuters described on July 16 as a contingency plan rather than an immediate blockade. The report, citing two senior Iranian officials and one regional contact, said the Houthis have positioned missiles and drones near the waterway in anticipation of possible orders to target transiting vessels. Bab el-Mandeb links the Red Sea to the Gulf of Aden and is a critical route for oil shipments and container trade between Asia, Europe and East Africa. The threat builds on earlier Houthi pressure on Red Sea traffic in 2026 and highlights how a wider confrontation could disrupt shipping, lift freight and insurance costs, and feed through to energy and financial markets.