Red Sea chokepoints: How Houthi gains are rattling global markets and raising risks for Taiwan’s energy security

Houthi gains around the Bab el-Mandeb Strait and attacks on Saudi oil infrastructure are adding pressure to global energy markets and exposing Taiwan’s dependence on imported energy.

The maritime chokepoint and the vanishing cushions

Houthi forces recently advanced into key Red Sea positions, including the capture of Perim Island at the mouth of the Bab el-Mandeb Strait.

A separate drone attack, believed to have originated in Iraq, temporarily shut Saudi Arabia’s East-West pipeline, which had been carrying about 4 million to 5 million barrels of oil per day to the Red Sea port of Yanbu to bypass disrupted shipping through the Strait of Hormuz.

The simultaneous pressure on the Strait of Hormuz, Bab el-Mandeb and the East-West route has reduced the market’s ability to reroute energy supplies.

American commentator Krystal Ball said that several buffers that had previously softened war-induced price spikes have weakened. Ball cited reduced Chinese crude imports, low US Strategic Petroleum Reserve stocks and disruption to Saudi Arabia’s East-West route, adding that market confidence in Washington's ability to stabilize prices has also eroded.

Oil and fuel markets reacted sharply, although crude prices have since pulled back from recent highs.

Columbia University economist Jeffrey Sachs warned that he expected oil prices to continue rising, creating economic hardship and political pressure on President Donald Trump ahead of the US midterm elections.

Sachs also pointed to the sharp rise in oil prices during the latest escalation.

Economic strains and strategic dilemmas

The crisis is imposing severe friction on supply chains worldwide. Associate Professor Mor Sobol, an expert in diplomacy and international relations at Tamkang University, told TCN that full territorial control of the Bab el-Mandeb is unnecessary to severely disrupt shipping.

"The Houthis only need to control a portion to spread fear," Sobol explained, adding that this could be enough to deter shipowners and insurers from using the route.

Sobol said the result is higher energy and transportation costs, delivery delays, and systemic strain across Asia and Europe. "Almost everyone suffers," Sobol told TCN, noting that the situation gives significant strategic leverage to Iran.

The economic effects are also being felt outside the region.

American commentator Kyle Kulinski noted that diesel prices have reached record highs, warning that household heating costs could rise sharply this winter.

Kulinski argued that banning US oil exports could drive up global prices, trigger Treasury selling and push interest rates higher, while leaving exports unrestricted could worsen domestic fuel shortages.

Lorenzo Kamel, a professor of international history at the University of Turin, argued that Iran is weaponizing the market as the US midterm elections approach.

Kamel said he believes such political exposure helps explain Washington’s reluctance to back Saudi Arabia directly.

Sobol similarly told TCN that Saudi Arabia is feeling the effects following recent strikes on its territory, and a perceived lack of support from allies despite the Mecca Joint Defence Agreement.

Meanwhile, American commentator Ana Kasparian criticized Western discourse for underestimating the Houthis, noting that downplaying the capabilities of Ansar Allah — the group’s formal name — puts Western strategy at a disadvantage.

Taiwan’s exposure: fuel-price support and energy security

Taiwan has not been insulated from higher international oil prices, but government measures and CPC Corporation’s price-stabilization mechanism have limited the immediate impact on consumers.

Asked what the latest developments in the Bab el-Mandeb Strait mean for Taiwan, Sobol told TCN that Taiwan is already experiencing the shock, but state-owned CPC Corporation has absorbed part of the cost through its price-stabilization mechanism.

Taiwan’s nine-in-one local elections are scheduled for Nov. 28.

Sobol said the governing Democratic Progressive Party (DPP) may try to absorb international oil price hikes as long as it can to shield the public from economic pain, though he questioned the long-term sustainability of such price support.

He added that Taiwan is also diversifying its liquefied natural gas (LNG) supply through Australian contracts and expanded long-term purchases from the United States.

Aside from fuel prices, Sobol told TCN that the Middle East conflict has also disrupted global helium supplies, a critical input for semiconductor manufacturing and therefore a concern for Taiwan’s chip industry.

The Ministry of Economic Affairs said in March that alternative helium supplies from the United States were available and that major Taiwanese chipmakers had recycling systems in place, helping buffer the disruption.

In a LinkedIn post, DPP Legislator Chen Kuan-ting (陳冠廷) called on the Ministry of Economic Affairs, the Energy Administration, Taipower, and CPC Corporation to immediately conduct comprehensive energy risk assessments and disruption stress tests.

Chen urged CPC review the schedules, origins and routes of oil and gas tankers expected in the coming months, identify shipments that could be affected by the Strait of Hormuz or Red Sea disruptions, and coordinate alternative supplies with non-Middle Eastern producers.

Chen also said Taiwan should consider how US strategic and military resources are allocated as Washington faces simultaneous security demands in the Middle East, Europe and the Indo-Pacific.

Sobol told TCN that he agrees with Chen’s evaluation, adding that Taiwan must maintain a clear-eyed assessment of its own capacities and vulnerabilities.

Beyond hedging against short-term price shocks, Sobol said that Taiwan needs to reevaluate its long-term energy security framework, one that factors cross-strait dynamics into its broader strategic calculations.

As shipping through key Middle Eastern routes remains severely disrupted, the effects are being felt globally. For Taiwan and the international community, the pressure on Bab el-Mandeb underscores how disruptions at distant maritime chokepoints can raise energy, shipping and supply-chain risks far beyond the region.