This day just keeps getting worse.

At the start of trading Monday it looked like Trump was on track to get some kind of ceasefire by now. Instead, we have talk of bombing steel plants and now this.

The Houthis in Yemen say they will enter the conflict on the side of Iran if any alliance joins the US and Israel. The possible chokepoint now is the the Bab el-Mandeb Strait, which they could try to blockade. If so, it’s not as devastating as the Strait of Hormuz because the traffic can go through the Suez canal. But it makes the trip significantly longer as the Saudi oil redirected to the pipeline in the Red Sea would now have to travel through the Mediterranean and then around Africa.

Saudi Arabia has also indicated it could enter into the war and that could mean a showdown between the Iran-backed Houthis and Saudi Arabia, who have already been fighting at various levels for 11 years.

With this announcement, we are seeing WTI crude back over $100 as all signs point to escalation rather than ceasefire.

Soon we will start to find out how this is hitting the global economy with gasoline and diesel prices spiking. In places, there are already signs of shortages and I can’t see those improving any time soon.

Update: Earlier reports said they would enter the war but the later statement made it clear that they will enter if others join the US and Israel. It looks like this is aimed at deterrence.