The World Bank has issued a stark warning that the global economy faces a significant slowdown risk as geopolitical tensions in the Middle East expand beyond the Strait of Hormuz.
The lender’s assessment comes after Houthi militants in Yemen threatened to block Saudi Arabian vessels in the Bab el-Mandab strait, effectively creating a dual chokepoint scenario for global shipping routes.
This escalation marks a critical widening of the conflict zone.
While markets have already priced in substantial risk premiums for disruptions in the Strait of Hormuz, the potential closure of the Bab el-Mandab threatens to sever a vital artery for global trade, particularly for energy shipments destined for Europe and Asia.
The World Bank’s intervention signals that the institution views the shipping disruption not merely as a regional security issue, but as a systemic threat to global growth trajectories.
The threat to Saudi vessels adds a new layer of complexity to the ongoing crisis.