23 September 2026

ALAN HAYES

 

NOT that long ago, the Strait of Hormuz was something most of us probably never thought about. We drive into the servo to fill up at the bowser and that was that. Fuel prices would fluctuate depending on the time of the month, but there was never any real concern that the supply of liquid gold would be put in jeopardy. But now you have it! The wild and inane machinations of one criminally insane grifter have impacted upon everyone—analysts have warned the world is just weeks away from returning to critically low levels of oil supply. Why? Because suddenly the world is obsessed with another strategic strait that until recently most of us couldn’t place on a map: the Bab al-Mandab. It connects the Red Sea and the Gulf of Aden and has been the main workaround for Saudi Arabia’s oil exports since the closure of the Strait of Hormuz.

 

Two weeks ago, the Bab al-Mandab was claimed by the Houthis, an Iranian-backed militia.

 

The Houthis are on a roll. They have intermittently made headlines over the years for disrupting shipping in the Red Sea and for their alliance with Iran. And now they’ve become meaningful players in a conflict that is hurting economies around the world. So, who are they? And what exactly do they want?

 

In the early 2000s, they were this ragtag militia in northern Yemen — rebels with guns who were fighting the central government. But over the past decade or so, they’ve become these unlikely power players in the region. They fought a Saudi-led military coalition to a quasi-draw in Yemen’s civil war. They became a headache for the United States and the rest of the world when they started attacking shipping in the Red Sea in 2023. They’ve also become more sophisticated.

 

The Houthis lord over a repressive de facto state that provides limited services to its impoverished people. They can be incredibly brutal. They believe they have a divine mandate to rule. Their slogan calls for death to America and Israel and “a curse upon the Jews.”

 

But they’re also these underdogs, who have consistently defied expectations. Time and time again, they’ve gone up against much bigger, wealthier foes. And time and again, those foes have been forced to back down.

 

The Houthis problem

 

Since the continual on-off closure of the Strait of Hormuz, the East-West Pipeline in Saudi Arabia was increasingly used to export crude oil via the Red Sea. That pipeline was attacked by drones two weeks ago, prompting warnings the country could run out of oil stocks for export within days if the damage isn’t repaired in time.

 

Riyadh, the capital of Saudi Arabia, has blamed the attack on Iranian-backed militias in Iraq, while at the same time Yemen's Houthi group, also backed by Iran, has been attacking inland Saudi Arabia.

 

The Houthis get support and weaponry from Iran and have been important allies. And their current ability to disrupt shipping in the Red Sea and the Bab al-Mandab Strait is giving Iran extra leverage in its war at a crucial time. But it’s important to understand that they’re doing this for themselves as much as they’re doing it for Iran. They very much have their own goals. But this doesn’t do much to help the looming oil crisis.

 

Economic analysts warned early last week and have suggested that as much as 4% of the world's oil supply could be taken offline because of the pipeline’s closure, CNN reports. “It would be truly calamitous if the East-West pipeline cannot be repaired and brought on stream soon,” Bob McNally, president of Rapidan Energy Group said. “It is by far the most important route by which Saudi Arabia was able to redirect crude flows.”

 

So, who are the Houthis?

 

The Houthis describe themselves as the liberators and legitimate leaders of Yemen. That pits them against the Saudi-backed government. The Houthis say they want the Saudis out, by which they mean they want the Saudis to stop supporting their Yemeni foes. They also want money, like access to Yemeni oil revenue and war reparations from Saudi Arabia, among other things. And they’re picking this moment to make a big push.

 

But who actually owns Yemen? There’s an internationally recognised Yemeni government, but a lot of people call them a quote-unquote “government.” At this point, the government is effectively a bunch of armed groups and other entities, under a council of eight different men.

 

Some Yemenis on the ground call them the “hotel government”, because they basically live in hotels in Riyadh and they have not a whole lot of credibility. They’re beholden to Saudi Arabia, which spent years bombing Yemen and are not popular there.

 

So, the Houthis now describe themselves as the state of Yemen. Yes, they’re a pariah group, they’re under sanctions and the West refer to them as a militia. Humanitarian conditions in northern Yemen, which they control, are desperate. But they do provide relative security in their territory under one unified authority, which many Yemenis complain that the Yemeni government does not. The economic situation is also not much better in government territory.

 

All this is well and good but it’s really a bad scenario for the Saudis, and for that matter the rest of the world, who are dependent upon oil supplies from the Middle East. In a way, Saudi Arabia’s situation is emblematic of the broader Gulf dilemma: What do they do now? They can’t really take on Iran head-on. They’re not strong enough. The U.S. has become as much of a liability as a help, but they also don’t have many alternatives.

 

That leaves diplomacy as the only real option, but diplomacy right now is not working—Mad King Donald has seen to that. Even if the Iranian state collapsed, you would could still have a dire situation with the Strait of Hormuz, because armed groups and militias could still easily disrupt it. A few guys with a few drones can pose a big threat. We know that in part because of the Houthis, and they are not going away any time soon.

 

Meanwhile, the world is held captive by an economic crisis that not only impacts on the price of fuel at the bowser, but is also driving up energy costs and accelerating the price of groceries, transport, and everyday household goods.

 

Australia, however, is surviving the 2026 oil crisis by shifting its fuel import routes toward the Americas, releasing emergency stockpiles, and funding a $10 billion national resilience package.

 

Experts state that switching to electric vehicles and expanding renewable energy are the best ways to permanently lower the country's dependence on foreign oil.

 

Yet the economic fallout has still contributed to broader inflationary pressures and subsequent interest rate adjustments by the Reserve Bank, with Treasury modelling warning of potential impacts on national GDP growth if global instability persists.

 

In the short term there is no quick fix to the problem cause by the ‘American Grifter’. The price of fuel at the bowser will only continue to rise, impacting on mortgages, groceries and about everything else as well.

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