Global oil markets face a dual supply shock as geopolitical tensions escalate.

Global oil markets face a dual supply shock as geopolitical tensions escalate. The Strait of Hormuz remains severely constrained while Iran actively encourages Houthi rebels to launch renewed attacks on Red Sea shipping through the Bab el-Mandeb strait. This creates unprecedented risk at two critical maritime chokepoints simultaneously. Between 2023 and 2025, Houthis attacked over 100 vessels, forcing costly reroutes around Africa. Current oil prices reflect only modest movement despite these physical supply constraints, suggesting markets may be underpricing the economic fallout. Analysts warn that meaningful price correction requires full restoration of Hormuz traffic, which remains far from guaranteed. A coordinated disruption at both chokepoints could amplify economic damage well beyond current market expectations and fundamentally destabilize global energy flows.