Donald Trump was upbeat about the Middle East at the weekend. “Everything’s gonna work out fine and dandy,” he said. He was demonstrating his almost superhuman ability to avoid facing unpleasant facts, the latest of which is that Iran’s Yemeni Houthi allies have taken control of one of the world’s most strategic waterways, Bab al-Mandab, the “Gate of Tears”.
Iran now has a near-chokehold on Saudi oil exports, having already shut down free passage through the Strait of Hormuz. Tehran can blackmail Trump with rising oil prices going into the US midterm elections in November. The latest opinion polls show that the Republicans will certainly lose the House of Representatives and perhaps the Senate, too. Trump could face another impeachment. Meanwhile, settlement of the Iran war on anything other than humiliating terms for the US is further away than ever.
On 9 September, before flying to the Republicans’ midterm convention in Dallas, Trump predicted that gas would fall below $2 a gallon, down from $4 or more now: “Right after the election, oil prices are going to be tumbling downward.” Even if that turns out to be true, figures published by Politico suggest that the average American household is already about $1,650 (£1,230) worse off as a result of the Iran war. Just over half of that is in direct energy costs. No wonder the polls say that a majority of Americans believe Trump has mishandled the war, with only three out of 10 voters supporting him on Iran.
This is not yet the oil shock of 1973, more of an oil squeeze. In 1973, the Arab embargo quadrupled the price; in 1979 the Iranian revolution doubled it; with the Russian invasion of Ukraine in 2022, Brent crude reached $139 (£103) a barrel. On Monday, the price of a barrel of Brent crude reached $109.80 (£81). And while the Houthis have already said the Bab al-Mandab Strait is closed to Saudi shipping, they have yet to declare a wider blockade.
The White House is indulging in some wishful thinking about the prospects of avoiding this. Visiting Dublin at the weekend, Trump said: “The Houthis called us, and they don’t want to fight with us…. They don’t want us to go after them.” A Houthi official denied to The New York Times that there had been any contact.
On Monday, Vice-President JD Vance said the administration was in touch with the Houthis. There may be a secret negotiation, but the Houthis are armed and funded by Iran. Even if they don’t take orders from Tehran, they coordinate.
Fighters loyal to the Houthi authorities at a rally to recruit more fighters in Yemen last week (Photo: Mohammed Huwais / AFP via Getty Images)It wouldn’t take much to halt the oil tankers – a single militiaman firing a rocket-propelled grenade from the shore, perhaps. If shipping stops using Bab al-Mandab – because of soaring insurance premiums, for instance – the economic pain would be considerable. A UN report in 2023 found that almost 9 per cent of global trade by sea passes through the strait. That includes a fifth of all containers and new cars and 13 per cent of crude oil.
To add to the bad news, the main east-west pipeline carrying oil in Saudi Arabia was hit by drones over the past week. The pipeline is 1,200km long and can carry as much as seven million barrels a day to the Red Sea. From there it is either transported up to the Suez Canal or down to the Bab al-Mandab Strait. Following the drone strikes, the wire services reported that portside stores of Saudi oil available for Red Sea export are only days from running out. Repairing the pipeline will apparently take weeks.
That pipeline attack was blamed on Shia militias in Iraq, which are firmly controlled by Iran. So Saudi Arabia finds itself facing attacks on two fronts, from Iraq in the north and Yemen in the south – and Iran has a hand in both. Worse from the Saudi point of view, the message from Trump is that the US won’t enter the conflict.
As the Houthis advanced, the Saudi ruler, Crown Prince Mohammed bin Salman, called Trump twice to urge him to order American airstrikes. Trump refused, perhaps remembering the last time he waged an air campaign in Yemen, in 2025. The US used a billion dollars’ worth of bombs and missiles in three weeks and failed to break the Houthis. Trump did order 100 military advisers to Riyadh, but he would not put American jets in the air.
The Saudis’ own very sophisticated air force was hardly seen last week, either. The kingdom’s warplanes may have carried out a few airstrikes, though not enough to make a difference. So Houthi fighters wearing flip-flops streamed down from the mountains onto the plains of the Yemeni coast. They took the city of Mocha (from where the coffee gets its name). A CNN report quoted a “regional source” as saying it was “a Saudi-American f***-up of epic proportions”.
The Houthis were supposed to be stopped by the official Yemeni government forces, which have been carefully built up by Saudi Arabia and the United Arab Emirates. But with no air cover to protect them, the government forces collapsed, their soldiers fleeing in disarray.
There were several reasons for the rout. One is that the Emirates pulled out their ground forces and advisers in January, after the Saudis told them to go. Another is that the Yemeni army is a ragbag coalition of different groups at odds with one another. The Houthis – showing considerable sophistication – also put out an AI-generated fake recording of the coastal commander ordering his men to withdraw.
But the most important factor was corruption. According to one estimate, only 20 per cent of the official Yemeni government strength was real: most of the troops were said to be ghost soldiers, on the payroll but not actually present. Many of the fleeing Yemeni soldiers did not drop their weapons when they ran; instead, they were seen selling them by the side of the road.
The Kaaba, Islam’s holiest shrine, at the Grand Mosque Complex in Saudi Arabia’s holy city of Mecca on Wednesday. The day before, the kingdom accused the Houthis of targeting the city (Photo: AFP via Getty Images)Government forces had been expensively kitted out with American weapons and vehicles by the Saudis and the Emiratis. The Houthis posted a video on X showing row after row of armoured troop carriers and Humvees that now belong to them. One of their commanders was filmed gleefully driving through rush-hour traffic in an MRAP – or Mine-Resistant Ambush Protected vehicle – a towering troop carrier that can protect seven infantry soldiers, but which was being used as his personal runabout.
Then on Tuesday Saudi Arabia said it had intercepted and destroyed a Houthi drone that was nearing the holy city of Mecca, home to Islam’s most sacred shrine, in what a Saudi spokesman called a “red line”. The Houthis denied targeting Mecca, calling the Saudis’ claim “lies”.
The Saudis now have an unpalatable choice. They can buy quiet with the Houthis by ending their proxy war carried out through the Yemeni government. But that would strengthen the Houthis and create a more powerful enemy for the next round of conflict, which many see as inevitable. Or they could escalate. That would lead to more Houthi – and Iraqi militia – attacks on Saudi pipelines and refineries. The Saudi economy could be crippled.
If that’s what happens, the question for the US will be how long it can stay out of the war in Yemen. It is a question for Britain, too. Bloomberg reports that the Prime Minister, Andy Burnham, is considering whether to give “operational support” to the Saudi military. Downing Street, the Foreign Office and the Ministry of Defence declined to comment to Bloomberg’s reporter, but Britain joined the US in helping Saudi Arabia the last time Riyadh fought a war against the Houthis.
The economic consequences of allowing Iran – through the Houthis – to hold Saudi Arabia to ransom might simply be too great to ignore. This latest crisis was always a possibility after the fateful decision by Trump to join Israel in attacking Iran. He has learned since that it’s easy to start fires in the Middle East, but not to put them out.
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