Analyst: If the Houthi attacks escalate, it may force Saudi Arabia and other oil-producing countries to cut production together

According to the Wall Street Journal, energy analysts warn that if the Houthi armed group in Yemen resumes attacks on shipping in the Red Sea, the oil market could face even more severe turmoil. Renewed attacks could cut a significant amount of oil from global supply and drive up oil prices. Saudi Arabia has been transferring as much crude oil as possible from the Persian Gulf to its Red Sea port of Yanbu, with cargo primarily heading to Asia from there. Although this has not fully offset the amount of oil that cannot pass through the Strait of Hormuz, it has helped limit the rise in global oil prices.

Analysts indicate that if Houthi attacks make it too dangerous for tankers to approach Yanbu, up to several million barrels of crude oil could be stranded in the Middle East each day. At that point, Saudi Arabia may be forced to cut production alongside Kuwait and Iraq.