Iran Orders Houthis to Arm for Red Sea Strike if US Hits Power Infrastructure

Iran Orders Houthis to Arm for Red Sea Strike if US Hits Power Infrastructure Tehran's conditional directive deploys missiles near Bab el-Mandeb and threatens Saudi Arabia's main export bypass route around Hormuz. Iran has instructed Yemen's Houthi forces to prepare to disrupt Red Sea oil shipping if the United States attacks Iranian power infrastructure, oilprice.com reported on Friday (2026-07-17). Missiles and drones have been deployed near the Bab el-Mandeb Strait, with Houthi commanders reportedly awaiting an order directly from the Islamic Revolutionary Guard Corps before beginning operations.⁵ The directive introduces a second chokepoint risk into the crude supply picture. Around 70% of Saudi energy exports are routed through the Red Sea specifically to bypass Hormuz — meaning a Houthi interdiction campaign at Bab el-Mandeb would cut into volumes that Riyadh has already diverted away from Iranian leverage in the Persian Gulf. The bypass route and the bypass route's exit point would both be under threat simultaneously.⁵ Hormuz itself remains the larger throughput risk by volume. EIA data show 21 million barrels per day passed through the strait in 2022, equivalent to roughly 21% of global petroleum liquids consumption. ICE Brent crude front-month traded at $87.82 a barrel on Friday (2026-07-17), down 0.36% on the session, while the VIX jumped 12.33% to 18.77 — a spread suggesting options markets are pricing more risk than spot crude is currently acknowledging.¹ Bypass capacity exists, but its geography now underscores the problem. EIA estimates around 3.5 million barrels per day of effective unused pipeline capacity could route crude around Hormuz: Saudi Aramco's East-West crude oil pipeline, which runs to Red Sea export terminals, carries a nameplate capacity of 5 million b/d and was temporarily expanded to 7 million b/d in 2019 when some natural gas liquids lines were converted to accept crude. The UAE links its onshore fields to the Fujairah terminal on the Gulf of Oman via a 1.5 million b/d pipeline.¹ A Houthi campaign against Red Sea tankers would neutralise the Saudi bypass entirely. Crude moving westward through the East-West pipeline exits at Red Sea terminals — precisely the corridor a Bab el-Mandeb interdiction would target. The combined scenario leaves no clean high-volume alternative corridor out of the Gulf for the region's largest exporters.^5,1 The demand exposure is concentrated in Asia. EIA data show 82% of the crude oil and condensate transiting Hormuz in 2022 was bound for Asian markets. A Red Sea closure would compound freight pressures already felt by Japanese and South Korean buyers: JKM Asian LNG front-month was trading at $19.92/MMBtu on Friday (2026-07-17).¹ The threat remains conditional. Iran's order is framed as a deterrent tied to a specific US military action against Iranian power infrastructure — not a standing order to attack. But the deployment of missiles and drones near Bab el-Mandeb is difficult to reverse once in position. The May 2026 disruption at Hormuz illustrated how quickly physical flows respond to perceived escalation: vessel tracking data showed commercial shipping through the strait slowed to near standstill on Monday (2026-05-18), with just one vessel exiting the Gulf while two entered over that period.² Analysts noted in late May (2026-05-18) that volatility in crude futures had begun to ease after an 8% single-session jump on news of failed US-Iran talks and the start of a US Hormuz blockade, as investors appeared to exhaust their capacity to respond to shifting signals from Washington. Houthi missile and drone strikes on Red Sea shipping present a different risk calculation. Unlike a Hormuz closure — which would require Iran to risk direct naval confrontation with US forces — Houthi attacks on commercial tankers near Yemen's coast carry lower escalatory risk for Tehran and carry clear precedent from the 2024 campaign.^3,4 Any US airstrike targeting Iranian power generation or grid infrastructure would cross the specific trigger named in Friday's (2026-07-17) directive. That is not the current stated US military posture, but it now defines the threshold at which Bab el-Mandeb becomes an active shipping hazard — and at which Saudi Arabia's principal bypass route ceases to function as one.⁵