Will Bab el-Mandeb shipping transits recover to at least 80 percent of their pre-2024 baseline before the end of Q4 2026?
What moved
US forces struck Iranian civilian infrastructure and Tehran attacked Kuwaiti power facilities; Hormuz tanker traffic has collapsed with no restart timeline and risk of extension into Bab el-Mandeb.
The market transmission
Hormuz carries roughly a fifth of seaborne crude; near-halted transit volumes tighten spare capacity globally and push crude higher through higher insurance and refining spreads. Bab el-Mandeb transit risk adds secondary chokepoint exposure. The mechanism is real supply tightness, not sentiment. Prices should price the spare capacity math, not narrative.
What would change this
Markets have priced some conflict premium already; the distinction is whether transit flows are genuinely halted (supply shock) or merely rerouted at higher cost (margin shock). The signal claims near-halted traffic but gives no volume figure or timeline, leaving the actual tightness unclear. Bab el-Mandeb escalation is speculative; Hormuz alone is the concrete fact. Safe-haven gold demand may be offset by rising real rates in a risk-off environment.
Directional leans
Brent ▲ highWTI ▲ high