Houthi capture of key strait threatens regional economies and security
The Houthis have taken control of Yemen's entire Red Sea coastline, including the port of Mocha and Perim Island, positioning them near the Bab al-Mandeb strait. This chokepoint handles about 12 percent of global trade, and its disruption is already affecting Egypt's Suez Canal revenues and triggering refugee flows to Djibouti. Regional nations face heightened security risks as shipping lines react cautiously.
The Bab al-Mandeb strait's strategic importance stems from its narrow width—roughly 20 kilometers separates Yemen's captured coastline from Djibouti's shore—making it far more constricted than the Strait of Hormuz. IMF PortWatch data shows Red Sea shipping volume already fell by 50 to 55 percent between 2023 and 2025 during earlier Houthi attacks, with major operators diverting around the Cape of Good Hope and adding over 20 transit days to voyages.
The humanitarian dimension is unfolding rapidly, with the IOM reporting more than 2,000 Yemeni refugees arriving in Obock, Djibouti within a single day. Meanwhile, the EU's Operation Atalanta naval mission operates under restrictive mandates that may limit its ability to respond to renewed attacks, even as multiple navies—including those of the US and China—use Djibouti as a logistics hub.
This development could ripple well beyond Yemen's borders. Egypt's Suez Canal revenues may face sustained pressure as shipping lines continue avoiding the Red Sea, potentially straining an already fragile national economy. Djibouti and Eritrea could gain strategic leverage as alternative ports, while Sudan and Somalia may face heightened security concerns from instability nearby. Global consumers could ultimately absorb higher freight costs, though the Houthis' stated commitment to safe navigation may temper immediate disruption if shipping confidence returns.