Potential Bab al-Mandeb Disruption Could Push Oil Toward $150+

• Strait of Hormuz alone handles ~20% of global oil
• Even partial disruption here is already bullish for crude

• Bab al-Mandab handles another ~12% and connects to the Suez Canal
• This route is critical for oil, LNG, fertilizers, and food supply

• Markets are currently focused only on Hormuz
• Bab al-Mandab risk is largely not priced in

What changes if both are affected:

• Nearly one third of global oil supply gets disrupted
• Europe faces major supply chain shock via Suez
• Fertilizer and food shipments also get hit
• Shipping costs and insurance spike sharply

Market impact:

• Oil can move above $150 very quickly
• Physical supply tightness worsens before futures adjust
• Inflation risk rises across energy and food

Bigger picture:

• This shifts from a supply issue to a global economic shock
• Recession risk increases significantly if disruption persists