Here we go again.
The Houthis have seized the Yemeni Red Sea coast, the port of Mokha and Perim Island, which divides the narrow Bab el-Mandeb Strait into two channels. The group now occupies positions from which it can monitor or threaten one of the world’s most important shipping routes.
Normally, that would be alarming enough. But the Strait of Hormuz on the other side of the Arabian Peninsula is already severely disrupted. Saudi Arabia consequently relied more heavily on its East–West pipeline to move crude from the Gulf to Red Sea export terminals. Then that pipeline was attacked too.
The temporary shutdown of the Saudi conduit illustrates fossil-fuel insecurity perfectly. Hormuz becomes dangerous, so oil is sent across the desert. Bab el-Mandeb becomes dangerous, so tankers consider the Cape of Good Hope. The bypass then becomes a target itself.
Each alternative reduces one risk while adding distance, cost and another piece of infrastructure that must be defended. The problem is no longer one strait, militia or war. It is an energy system that requires enormous quantities of combustible material to cross unstable borders and narrow waterways every day.
The Emergency Keeps Changing Name
Energy markets discuss each disruption as an exceptional event. Russia’s invasion of Ukraine and weaponization of pipeline gas were exceptional. The closure of Hormuz was exceptional. Houthi attacks in the Red Sea were exceptional. Damage to pipelines, LNG plants and tankers was exceptional. American pressure on Europe to purchase more US LNG was presented as trade policy rather than energy vulnerability.
After enough exceptions, a pattern should become visible. Europe spent decades increasing its reliance on inexpensive Russian pipeline gas. When Moscow reduced supplies in 2022, prices exploded and governments rushed to fill storage and construct LNG terminals. Russian dependency was then replaced partly by greater reliance on the United States.
That switch improved diversification and was essential during the crisis. It did not create autonomy.
The United States subsequently folded energy purchases into wider trade negotiations. Under the 2025 framework, the EU pledged to facilitate $750 billion of US energy purchases over three years, an implausibly large number that Brussels could not directly control.
This is not equivalent to Russia cutting a pipeline, and the United States remains a fundamentally different partner. But it demonstrates the same structural truth: whoever controls a fuel Europe needs every day acquires leverage over European decisions.
Dependency does not stop being dependency because the supplier is friendly today.
Fifty Years of Warnings Were Apparently Not Enough
The current crisis is not a failure to predict the future. The warning has been repeated for half a century. The 1973 Arab oil embargo more than tripled prices and exposed Western dependence on Middle Eastern crude. The Iranian Revolution produced another shock in 1979. The Iran–Iraq War and Iraq’s 1990 invasion of Kuwait again removed production from the market. Libya and Venezuela later demonstrated how political breakdown and sanctions can interrupt supply.
More recently, attacks on Saudi Arabia’s Abqaiq facilities in 2019 temporarily removed around 5% of global oil supply. The Nord Stream explosions showed that even subsea pipelines are vulnerable, while cheap drones have proved capable of rerouting global trade.
The scale has changed, but the mechanism has not. In 2024, roughly 20 million barrels of oil per day passed through Hormuz—about one-fifth of global petroleum consumption. Bab el-Mandeb carried around 8.7 million barrels per day in 2023. Rerouting adds weeks of sailing, consumes more fuel and raises insurance and freight costs.
Consumers experience this system as a price at the pump or on a heating bill. Strategically, it is a permanent transfer of power to producers, transit states, armed groups and whoever can threaten the route between them.
Strategic Reserves Buy Time, Not Independence
Europe and Asia are not defenseless. Governments maintain strategic reserves, LNG cargoes can be redirected and producers outside the Gulf can increase supply. Pipelines and alternative ports provide valuable redundancy.
These measures are why every disruption does not become an immediate physical shortage.
But buffers do not change the model. Reserves are depleted when used, redirected tankers must arrive from somewhere else and spare capacity belongs to another producer. If a crisis persists, competition for finite fuel returns at a higher price.
This year’s conflict has created what the IEA describes as the largest oil-supply disruption in market history, exceeding even 1973.
The rational response is not to abolish reserves or alternative routes. It is to reduce the number of essential services that depend on them.
Electrification Removes the Daily Delivery
An electric vehicle does not care whether Bab el-Mandeb is open. A heat pump does not require an LNG tanker next Tuesday. Wind turbines and solar panels continue generating after the ships that delivered them have departed.
Renewables require grids, storage, backup capacity and significant quantities of minerals. They do not eliminate geopolitics.
They change its timing and severity. Oil and gas are consumable flows. Stop delivery and fossil assets eventually stop operating. Minerals are embedded in equipment. A shortage can delay new batteries, grids or turbines, but does not switch off those already installed. Many materials can also be recovered and recycled.
That distinction is fundamental. As the IEA notes, an oil shock affects every driver using fuel, while a mineral shortage mainly affects the supply of new equipment.
Europe should therefore double down on renewable generation, electrified transport, heat pumps, batteries, grids and demand flexibility. The Commission estimated that faster clean-energy deployment could cut the EU’s fossil-fuel import bill by €130 billion annually by 2030.
That is not simply climate spending. It is the purchase of strategic freedom.
Europe Must Not Exchange One Monopoly for Another
The obvious objection is that Europe risks moving from imported oil and gas to imported Chinese solar panels, batteries, magnets and processed minerals.
That risk is real. China is expected to supply more than 60% of refined lithium and cobalt in 2035 and around 80% of battery-grade graphite and rare earth elements. Europe cannot call an energy system autonomous if it has no meaningful ability to manufacture or repair it.
But the answer is not continued fossil dependency. It is to build the material side of the transition with the same urgency as generation.
The EU’s Critical Raw Materials Act targets 10% domestic extraction, 40% processing and 25% recycling by 2030. Europe should accelerate responsible mining and deepen partnerships with Ukraine, the Western Balkans, Canada and Australia. More importantly, it must invest in refining, cathodes, magnets, battery cells and recycling.
This supply chain will have impacts and geopolitical risks. It must be diversified, regulated and circular. Yet its materials build assets that produce or store energy for years. They are not burned once and replaced with the next shipment.
The Last Fossil Crisis Will Not Announce Itself
The Houthi advance is serious. Governments must protect navigation, stabilize markets and prevent a humanitarian disaster in Yemen.
But treating the episode only as another shipping emergency would repeat the central mistake of every previous oil shock.
There will always be another unstable producer, coercive supplier, damaged pipeline, sanctioned exporter or contested chokepoint. The geography changes. The dependency remains.
Europe and Asia cannot control every strait, regime or war. They can control how much of their prosperity depends on fuel passing through them.
The next oil shock is already here. The real objective should be making sure fewer consumers notice the one after it.
By Leon Stille for Oilprice.com
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