Houthi forces seized Yemen’s Red Sea coast, Mokha port, and islands including Perim in mid-September 2026, establishing direct territorial leverage over the Bab el-Mandeb Strait and enforcing a selective blockade on Saudi-linked vessels since July. Shipping traffic fell sharply to 40-60% below prior levels, with daily transits dropping to single digits on some days before partial recovery, prompting widespread rerouting around the Cape of Good Hope. Saudi-backed Yemeni government forces launched a counteroffensive in early October, claiming recapture of Dhubab and parts of Perim, claims the Houthis dispute amid ongoing clashes and reported attacks on tankers. No authority has declared a formal closure, and commercial vessels continue transiting despite elevated risks. These developments have produced trader consensus reflecting meaningful but contained probability of full effective shutdown by year-end, driven by Houthi capability gains offset by incomplete control, selective targeting, and active pushback.