Iran, Houthis attack oil tankers, escalating Gulf tensions

Iran and Yemen’s Houthi movement have attacked oil tankers, escalating tensions in the Bab al-Mandeb strait and Strait of Hormuz, according to reports from Al Jazeera. This development follows ongoing U.S. bombing of Iranian targets and retaliatory actions by Iran against U.S. military sites in the Gulf. The attacks have caused significant shipping disruptions in these strategic maritime chokepoints. Market pricing suggests increased concerns about the potential for broader conflict, particularly involving Houthi military actions against other regional players. Key Takeaways Market pricing suggests increased concerns regarding Houthi military action against Israel, with the likelihood for such actions by July 31 currently priced at 11.5% YES. Recent attacks by Iran and Houthis on shipping lanes appear to have contributed to increased perceived risk of disruptions in the Bab al-Mandeb Strait, with the probability of an effective closure by September 30 now at 28% YES. The regional escalation involving critical shipping routes appears consistent with scenarios of increasing military tensions, impacting related markets such as potential ceasefires and regional stability. What to Watch...