Key development: The Iran war is widening and getting more expensive: the Houthis have seized near-control of the Bab el-Mandeb, Saudi Arabia shut its East-West Pipeline after an attack, and the Pentagon’s inspector general confirms munitions shortfalls.
Economy
Saudi Arabia shut down its East-West Pipeline after it was attacked, just as the war’s price tag passed $38 billion. That pipeline was the main workaround while the Strait of Hormuz was closed, so oil prices are spiking and US consumers are being told to expect “short-term sacrifice.” (France24, Al Jazeera, The Hindu, MEE)
Context: The 1,200-km pipeline carries Saudi oil across the peninsula to the Red Sea, and it had become the main route for Middle East oil while Hormuz stayed largely shut. It is now down after an attack that damaged two pumping stations [UNCONFIRMED]. The US Congressional Budget Office says the war will keep inflation about half a percentage point higher into early 2027. Trump has also conceded prices won’t drop before the midterms.
Sources: France24 | Al Jazeera | The Hindu | MEE
Regional Actors
Houthis captured Perim Island and the port city of Mocha, putting them in near-control of the Bab el-Mandeb strait. That is the other key oil chokepoint, so this opens a new front in the war and directly threatens Saudi oil exports. (France24, BBC, Euronews)
Context: This is a lightning advance for the Houthis — Perim Island and Mocha give them a grip on the southern entrance to the Red Sea. Saudi Arabia has launched dozens of airstrikes in response, and the Houthis claim they shot down a Saudi fighter jet. The BBC calls it their most impressive military coup in years [UNCONFIRMED].
Military Operations
Two sailors are missing after the tanker El Gaia was hit in the Strait of Hormuz, and an Iranian cargo vessel was also struck near Qeshm Island. Iran says El Gaia caught fire after hitting mines, while the US says it was struck by a missile and then a drone — the latest sign that shipping is being attacked on both sides of the Arabian Peninsula. (BBC, The Hindu, France24)
Context: Oman reported the two missing sailors. The tanker was apparently operating in “dark mode” with its transponder off, carrying 14 Indian and 11 Pakistani crew members. Separately, the Iranian cargo ship attack near Qeshm killed one person and wounded four, according to Iranian state media, which blamed a “terrorist enemy.”
US Policy
The Pentagon’s inspector general confirmed the Iran war has caused munitions shortfalls, directly undercutting Trump’s claim that supplies are “virtually limitless.” It also found a resupply bottleneck, and seven Republicans have now backed a war powers resolution that widens the GOP split with Trump. (BBC, The Hindu, JPost)
Context: The inspector’s report said munitions expenditure on the war had resulted in strategic inventory shortfalls and exposed industrial base bottlenecks for resupply. That is a formal rebuke to the administration’s public line, and the congressional resolution shows a growing number of Republicans are willing to challenge the president on the war.
Diplomacy
Trump now says he is “open” to talks with Iran, and China is publicly urging both sides back to the table. That is a shift from weeks of saying it was too early to deal, and China also wants the Strait of Hormuz reopened. (France24, MEE)
Context: On Truth Social, Trump said Iran “wants to make a deal, quickly and badly” and that the US was open to engaging. China, meanwhile, said it was willing to “safeguard Iran’s legitimate rights” and pushed for resumed negotiations. Worth watching whether this becomes actual diplomacy or just posturing before the midterms.
What to watch: Whether Trump’s openness to talks translates into anything real before the midterms, and whether the Houthi advance forces Saudi Arabia to negotiate even as it pounds Yemen from the air.