NEW YORK, Oct. 12, 2026 /PRNewswire/ — Egan-Jones released an analysis examining how relatively inexpensive missiles and drones have given Shiite groups leverage over the chokepoints that carry Middle East petroleum exports, and what that shift could mean for global trade and credit markets.
The commentary points to recent events as evidence. Yemen-based Houthis have taken control of Mayun, a strategic island in the Red Sea, and Saudi Arabia’s cross-peninsula pipeline was shut after drones launched from Iraq struck it. Saudi Arabia has fought the Houthis for the past decade without success, which Egan-Jones attributes in part to Yemen’s mountainous terrain and the persistence of the fighters.
Egan-Jones sets these developments against the trading system built over several centuries, in which surplus output moved by sea at low cost and petroleum exports later underpinned manufacturing worldwide. Shiite strongholds now sit at the major chokepoints for those exports, and weapons cheap enough to be used at scale have narrowed the gap between a small armed group and a state.
A military remedy looks unlikely, according to the firm. Prolonged campaigns in Afghanistan and Iraq have made the United States reluctant to undertake similar engagements, the European Union is preoccupied with Ukraine, and China, India, and Japan, though exposed, can draw on other suppliers and are shifting toward electric vehicles. United States vessels cleared mines near the Strait of Hormuz, but Egan-Jones considers missile and drone attacks a continuing threat.
The current Western approach relies on economic pressure. Iran’s currency weakened from roughly 186,500 per dollar in 2021 to about 2.3 million in September 2026, a loss of approximately 91.9 percent in dollar terms, though the firm cautions that currency deterioration alone does not guarantee political change.
Two paths follow. Egan-Jones suggests a negotiated arrangement covering the movement of petroleum, accompanied by wider nuclear proliferation in the Gulf, would be unpalatable but manageable over time. Sustained curtailment of regional energy exports would be far costlier, forcing adjustments in food production, which depends on petroleum-based fertilizer, and in transportation, and weighing on global output while sovereigns and other borrowers already strain to meet obligations. The firm publishes the analysis so institutional investors and risk managers can weigh those conditions early.
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SOURCE Egan-Jones Ratings Co.
