Saudi Arabia's Backup Route Is Gone: The Week Iran's Proxies Closed All Three Exits
In 48 hours this week, Yemen's Houthis completed their capture of the Bab el-Mandeb Strait and drone strikes shut Saudi Arabia's East-West pipeline, eliminating the bypass route the oil market built its supply assumptions around. This is what the encirclement looks like.
Saudi Arabia’s East-West Pipeline was built for this moment. The 1.2-million-barrel-per-day Petroline runs roughly 1,200 kilometers from the kingdom’s oil heartland near Abqaiq in the Eastern Province to the Red Sea port of Yanbu, built specifically so Saudi Aramco could keep exporting crude even when the Strait of Hormuz went dark. When the US-Iran war effectively closed Hormuz in March, Riyadh accelerated Red Sea loadings through Yanbu and the pipeline became Saudi Arabia’s primary crude export route.
It is now shut.
In 48 hours between Thursday and Friday, Houthi forces completed their capture of Yemen’s entire Red Sea coastline, seizing Perim Island at the narrowest point of the Bab el-Mandeb Strait, and drone strikes originating from Iraq hit multiple pumping stations along the East-West Pipeline. Saudi Arabia shut the pipeline Friday. Crude headed south from Yanbu toward Asian buyers now has nowhere to go. Both of the Middle East’s primary maritime oil exits are contested. The backup route is gone.
How the Pipeline Trap Works
The East-West Pipeline was always a partial solution. It routes Saudi crude around Hormuz, depositing it at Yanbu on the Red Sea. But Yanbu is not the final destination: tankers loading at Yanbu must still reach buyers. For European refineries, that means going north through the Red Sea and the Suez Canal, a route largely unaffected by Bab el-Mandeb. For Asian buyers, which represent the majority of Saudi crude exports, it means going south past Bab el-Mandeb into the Gulf of Aden and the Indian Ocean.
That geographic reality means the pipeline was never a true bypass of the broader chokepoint problem. It solved for Hormuz. It did not solve for Bab el-Mandeb. As long as the strait at the southern end of the Red Sea remained open, the partial solution was adequate. This week, it stopped being open.
What Happened This Week
The Houthi offensive down Yemen’s Red Sea coast had been building for weeks. On September 10, Houthi forces took Mocha, the coastal city that anchored Yemeni government-aligned defenses along the western coast. On September 11, they seized Dhubab and then Perim Island, known locally as Mayyun Island, which sits at the center of the 29-kilometer-wide Bab el-Mandeb Strait.
Tasnim News Agency, citing IRGC-connected sources, reported that the Houthis now control the Strait of Mandeb. Middle East Eye, citing people familiar with the operation, reported that “the lightning Houthi advance down Yemen’s Red Sea coast came with direct guidance from Iran’s Revolutionary Guards seeking to open a new front in the US-Israel war.” The AP, Times of Israel, and Middle East Monitor all confirmed the island seizure from Yemeni government military sources.
That same night, satellite images showed smoke rising near Saudi Arabia’s East-West Pipeline. Two US officials confirmed to CNN that multiple pumping stations had been hit. Saudi Arabia’s foreign ministry said Friday the drones were launched from Iraq. Trump told reporters Iran was “probably responsible.” Iraq’s Prime Minister Ali al-Zaidi condemned the attack, dismissed the police chief of Maysan province in southeastern Iraq, and ordered an investigation. Saudi Arabia chose not to retaliate, following a direct request from al-Zaidi. As of Sunday, no timeline for pipeline resumption has been announced.
The Strait of Hormuz, meanwhile, had another bad weekend. A second vessel was reported burning there this morning, the latest in a series of incidents after the US limited its tanker escort windows to specific transit times, a practical withdrawal of the open-ended protection it had been providing.
This is the week the double chokehold described in July became a triple one.
The IEA’s Numbers
The International Energy Agency released an updated global supply forecast on Friday, the same day Saudi Arabia shut the pipeline.
The IEA cut another 1.4 million barrels per day from its 2026 global oil supply outlook and said it no longer expects normal Gulf oil flows to return this year. The agency now projects global oil supply will fall by 5.7 million barrels per day in 2026, roughly 6% of pre-war production.
Saudi crude output fell to 6.24 million barrels per day in August, the kingdom’s lowest production level since 1990, according to data Aramco reported directly to OPEC, cited by Middle East Monitor and confirmed by Reuters. That is roughly 1.9 million barrels per day below pre-war output.
Brent crude jumped more than 6% Thursday to top $107, with overnight futures reaching $109.97 per barrel, the highest level in four months, according to Reuters. WTI broke through $100. US diesel prices crossed $6 per gallon for the first time, and the White House is weighing whether to invoke the Defense Production Act to expand domestic refining capacity, with American refineries already running at 98% utilization, Reuters reported. RBC Capital Markets analyst Helima Croft warned in a note cited by Reuters that Brent could reach $120 by year’s end if the conflict continues at this pace.
The IEA’s revised number represents a compounding of damage. The agency has now cut its 2026 supply outlook five times this year, and each cut has come against a backdrop of new events that made the prior estimate look optimistic.
The Oman Meeting and What It Means
Iran announced Friday that the foreign ministers of Iran, Oman, and several Arab states would meet in Muscat on Monday to discuss navigation routes through Hormuz. President Masoud Pezeshkian called it a sign of “good intentions toward neighboring countries.”
By Saturday the meeting’s scope had narrowed. Bahrain said it would not attend. An Iranian official told Reuters no signed deal was expected from the session. Tasnim News Agency, citing another Iranian official, said the Iran-Oman understanding reached in advance of the talks “does not provide for immediate reopening of the Strait of Hormuz.”
Iran is not negotiating from weakness this week. Its ally controls the Bab el-Mandeb. Hormuz remains restricted. The pipeline that was supposed to provide the exit route is shut. Whatever Iran tables at Muscat, it does so while holding more leverage than at any prior point in this conflict.
This is not the first time Iran has proposed a Hormuz navigation framework in Oman while continuing to restrict the strait. A similar gambit in June produced an Iran-Oman joint working group that never produced a functioning agreement. The full trajectory of that episode is documented here.
Iran’s Architecture
The geometry of this week’s events is not accidental. IRGC Quds Force commander Esmail Qaani publicly described a “security belt” strategy as early as June, referencing both Hormuz and Bab el-Mandeb as interdependent pressure points. The Houthis provide deniable, geographically dispersed reach that Iran’s own forces cannot provide without triggering direct military escalation.
The pipeline attack from Iraqi territory adds a third vector. Saudi Arabia absorbed the strike without retaliating, in part because an open conflict with Iraq would fracture the Arab coalition Riyadh has been carefully managing throughout the war. Iran’s proxies in Iraq, who have previously struck US bases and Saudi infrastructure during the 2019-2020 period, provide the same deniability in that theater that the Houthis provide in Yemen.
The strategic logic is consistent: create enough friction across enough exit points that market actors begin pricing Gulf crude as structurally unavailable, not temporarily disrupted.
What to Watch Next Week
Monday’s Muscat attendance list. Who shows up, and at what level, will say more than any communique. If the UAE foreign minister attends (Pezeshkian met Abu Dhabi’s Crown Prince Mohammed bin Zayed at the BRICS summit in New Delhi Saturday), that would signal genuine Gulf convergence. If only Oman and Iran sit at the table, the meeting is diplomatic theater.
Whether the Houthis formalize a Bab el-Mandeb closure for Saudi shipping. Houthi military spokesman Yahya Saree said Saturday that navigation in the Red Sea is “safe except for Saudi ships.” Turning that statement into a formal navigation prohibition would bring Bab el-Mandeb disruption to the same legal and operational status as the current Hormuz situation, and would force Lloyd’s and the Joint War Committee to reclassify the entire Red Sea.
The Saudi East-West Pipeline timeline. If Aramco announces a resumption date, markets will treat this as a temporary supply shock. If the timeline stays open-ended past mid-week, analysts will begin revising fourth-quarter supply models downward again.
Whether the Trump administration reverses its decision on Houthi strikes. Times of Israel reported Saturday that Trump twice declined Saudi Crown Prince Mohammed bin Salman’s personal requests for US military strikes against Houthi positions in Yemen. That decision is the single variable with the most near-term impact on Bab el-Mandeb. A US air campaign against Houthi coastal positions is a different conflict from what we have now; the decision not to mount one leaves the strait in Houthi hands indefinitely.
Oil price behavior on Monday’s open. Brent going into the weekend is priced around $107 to $109, a war premium that still assumes some level of supply recovery. Friday’s IEA revision and Sunday morning’s second Hormuz vessel strike give markets fresh material to process when trading resumes. If the Monday open gap is wide, it signals the market is finally reckoning with the supply picture the IEA has been describing.
Analysis pieces on this site label opinion and inference clearly. The strategic architecture described here draws on reported sourcing from Reuters, Middle East Eye, AP, OilPrice, and the IEA’s September 12 report. Conclusions about Iran’s strategic intent are the desk’s inference from those facts.
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