Analyst: Houthi Attacks Escalation May Force Saudi Arabia and Other Oil Producers to Cut Production

On March 28, energy analysts warned that if the Houthi forces in Yemen resume attacks on maritime shipping in the Red Sea, the oil market could face even greater turmoil. Renewed attacks could significantly cut oil supply from the global market and drive up oil prices. Saudi Arabia has been shifting as much crude oil as possible from the Persian Gulf to its Red Sea port of Yanbu, with shipments primarily heading to Asia. While this has not fully offset the volume of oil that cannot pass through the Strait of Hormuz, it has helped to limit the rise in global oil prices. Analysts stated that if Houthi attacks make it too dangerous for tankers to approach Yanbu, up to millions of barrels of crude oil could be stranded daily in the Middle East. At that point, Saudi Arabia may be forced to cut production alongside Kuwait and Iraq.