A Houthi advance near one of the world’s most important shipping passages is adding fresh pressure to oil, fuel and transportation costs, with Alberta consumers potentially facing further increases at the pump.

Four Yemeni government sources told Reuters that Iran-aligned Houthi forces had reached Perim Island in the Bab el-Mandeb Strait. Two of the sources said government forces had withdrawn from the island and the Houthis had also taken Dhubab, a coastal town facing the narrow shipping channel.

Bab el-Mandeb connects the Red Sea with the Gulf of Aden and provides access to the Suez Canal. Greater Houthi control over the area could force more commercial vessels to avoid the route or pay higher insurance and security costs.

The development comes as shipping through the Strait of Hormuz, on the other side of the Arabian Peninsula, remains severely disrupted by the war involving Iran, the United States and Israel.

Saudi Arabia has relied more heavily on its Red Sea export route since traffic through Hormuz slowed. However, its 1,200-kilometre East-West oil pipeline was temporarily shut down following drone attacks, according to Saudi officials.

The pipeline had recently been carrying between four million and five million barrels of oil per day, equal to about four to five per cent of global supply. Saudi oil production fell to six million barrels per day in August, its lowest level in more than 30 years, according to the International Energy Agency.

Brent crude settled at US$104.61 per barrel Friday and West Texas Intermediate finished at US$100.05. Both benchmarks gained more than eight per cent during the week, although prices fell Friday as traders considered reports of possible negotiations over shipping through Hormuz.

The combination of lower production, damaged infrastructure and greater danger for ships has also driven up transportation costs. The price of moving oil from the Gulf of Oman to China in a large tanker reached approximately US$11.50 per barrel, according to Baltic Exchange data cited by Reuters.

For Canadians, the immediate effect is most likely to appear in gasoline, diesel and aviation fuel.

The Canadian Fuels Association says a commonly used rule of thumb is that a US$1 change in crude oil prices can translate into a change of approximately one cent per litre at Canadian pumps, assuming other factors remain unchanged.

Retail prices are also affected by the Canadian dollar, refinery capacity, taxes, inventories and local competition. Prices could stabilize or fall if the Saudi pipeline reopens quickly, shipping risks ease or diplomatic talks make progress.

Diesel remains the larger concern for rural Alberta. It powers farm machinery and much of the trucking, construction and resource economy. Higher diesel costs can eventually reach grocery shelves and other businesses as producers, processors and transportation companies adjust their prices.

The International Energy Agency now expects global oil supply to decline by 5.7 million barrels per day in 2026, compared with its previous projection of about four per cent. The agency said supply is falling faster than demand and global inventories are being depleted at a record pace.

Imported goods could also become more expensive if ships are forced to take longer routes around southern Africa.

The size of any Canadian price increase will depend mainly on whether the Houthis interfere with shipping through Bab el-Mandeb and how long disruptions to Saudi oil infrastructure and the Strait of Hormuz continue.