The conflict may be getting worse, and the market is starting to feel it.
The Iran-aligned Houthi forces in Yemen have said they are ready to step in, especially if the situation gets worse with US and Israeli engagement or if the Red Sea becomes a launch pad for attacks on Iran.
Geography is what makes this more than simply talk.
The Houthis have a lot of power in the Bab al-Mandab Strait, which is a key chokepoint for roughly 6 million barrels of oil that pass through every day.
Now put the pieces together:
If pressure builds up at both Bab al-Mandab and the Strait of Hormuz at the same time, the possible disruption may reach 25 million barrels per day, which is about a quarter of the world's oil supply.
At that point, it's not just a fight in one area.
It turns into a supply shock all around the world.
