There is a kind of backup plan for oil supplies. It could soon be under threat as well.

From Marketplace, I'm Sabri Benishore, in for David Brancaccio. The Iran war continues to escalate.

Yemen's Houthis have entered the fight, launching attacks on Israel over the weekend.

That raises concerns they could again start disrupting oil and cargo moving through the

Red Sea.

The Red Sea is Saudi Arabia's backup export channel for some limited amounts of oil and other cargo.

Julia Cornado is founder of macro policy perspectives and a professor at UT Austin and is here to talk about it.

Good morning, Julia.

Good morning.

So now that we've got Houthis

on the other side of Saudi Arabia, threatening supplies there, what does that mean for oil disruptions

and beyond? Yeah, I think the longer this conflict drags on, and not only the Strait of Hormuz is closed,

but now we're looking at possible

disruptions in the Red Sea. The more we worry about disruptions beyond just oil, other

industrial products like aluminum and helium, which are necessary for the semiconductor

production process and also consumer goods in the Red Sea. So a much broader potential set of

supply chain disruptions is possible. Does this add to worries about inflation or when do we

start worrying about economies around the world actually slowing down because of this?

Well, the challenge is that both are at risk. This is inflationary. It is also something that can

destroy demand and cause recessions. Certainly in many countries, if not the U.S., so both are

concerns, and that's the challenge for central

banks. The risks to both sides of their mandates are very high right now.

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