Assessing the Geopolitical and Commodity Market Impacts of U.S. Sanctions on Yemen's Houthis

The U.S. has intensified its pressure on Yemen's Houthi rebels through a series of targeted sanctions, aiming to disrupt their access to critical energy resources and funding streams. In April 2025, the Treasury Department sanctioned three shipping companies—Zaas Shipping & Trading Co, Great Success Shipping Co, and Bagsak Shipping Co—for delivering oil and gas to Houthi-controlled ports like Ras IsaUS Sanctions Shipping Companies for Delivering Oil and ...^[1]. These measures, coupled with the designation of the Houthis as a Foreign Terrorist Organization in March 2025Frequently Asked Questions - Newly Added^[5], signal a strategic shift toward isolating the group economically. However, the ripple effects of these sanctions extend far beyond Yemen, with profound implications for global energy infrastructure and commodity markets.

Energy Infrastructure at Risk: The Bab el-Mandeb Strait and Rerouted Trade

The Bab el-Mandeb Strait, a critical chokepoint for global oil and gas transit, has become a focal point of instability due to Houthi attacks on commercial vessels. In 2025 alone, the Houthis targeted oil tankers such as the Saudi-owned Amjad and the Greek-operated Blue Lagoon 1, prompting shipping companies to reroute vessels around the Cape of Good Hope—a 6,000-mile detour that adds weeks to transit times and significantly raises costsHouthis continue to target oil tankers in the Red Sea^[2]. According to a report by the Atlantic Council, approximately 9.2 million barrels of oil pass through the strait daily, making it a linchpin for global energy securityGlobal Gold at the Crossroads of Crisis^[3]. Disruptions here not only elevate insurance premiums but also create cascading effects on supply chains, as seen during the 2019 Houthi attacks on Saudi oil facilities, which temporarily spiked oil pricesResearch| Category Commodities^[4].

Commodity Market Volatility: Oil, Precious Metals, and Safe-Haven Demand

The interplay between geopolitical tensions and commodity markets has been starkly evident in 2025. While U.S. sanctions on the Houthis have not directly caused oil price surges—due to factors like increased U.S. production and declining heating oil demand—the broader Middle East instability has driven demand for safe-haven assets. Precious metals have outperformed other commodities: platinum surged nearly 50%, gold rose 26%, and silver gained 25% in the first half of 2025Houthis continue to target oil tankers in the Red Sea^[2]. This trend aligns with historical patterns, such as the 160% gold price increase following the 1979 Iranian RevolutionGlobal Gold at the Crossroads of Crisis^[3], where geopolitical crises trigger a flight to gold as a hedge against inflation and uncertainty.

The Israel-Iran conflict and Houthi-related disruptions have further amplified this dynamic. As stated by a report from the Tehran Times, gold has historically acted as a barometer for geopolitical instability, with surges observed during major wars and financial crisesGlobal Gold at the Crossroads of Crisis^[3]. The U.S. sanctions on Russian metals in 2022, which paralleled the current Houthi sanctions, also contributed to a 16.2% rise in copper prices in early 2025, driven by demand from green energy and AI sectorsResearch| Category Commodities^[4]. However, oil markets remain more resilient to Houthi-specific disruptions, with prices influenced more by global production trends than localized attacksResearch| Category Commodities^[4].

Strategic Implications for Investors

For investors, the key takeaway lies in balancing exposure to energy and precious metals sectors while hedging against regional instability. The Bab el-Mandeb Strait's vulnerability underscores the need for diversified energy portfolios, particularly as Iran appears to leverage Houthi actions to maintain favorable oil pricesHouthis continue to target oil tankers in the Red Sea^[2]. Meanwhile, precious metals offer a compelling hedge against macroeconomic risks, with gold and silver poised to benefit from prolonged geopolitical tensions.

However, the indirect effects of U.S. sanctions—such as increased shipping costs and rerouted trade—could strain global supply chains, particularly for oil-dependent economies. A study published in Security and Energy Policy highlights that non-linear geopolitical risks can disproportionately affect energy consumption in import-dependent nations, creating asymmetric market pressuresGlobal Gold at the Crossroads of Crisis^[3]. Investors should also monitor the potential for renewed Houthi attacks on oil infrastructure, which could trigger sudden price spikes.

Conclusion

The U.S. sanctions on Yemen's Houthis represent a calculated effort to destabilize the group's economic lifelines, but their secondary effects on global energy infrastructure and commodity markets are undeniable. While oil prices remain tethered to broader supply-demand dynamics, the surge in precious metals underscores the enduring appeal of safe-haven assets during geopolitical crises. For investors, the path forward requires a nuanced approach: hedging against volatility in energy markets while capitalizing on the long-term appeal of gold and silver as stores of value in an increasingly fragmented world.