Vital Oil Shipping Lane Becomes Target In Yemen’s Civil War

 

Yemen’s strategic Red Sea port, through which some 4 million barrels of oil flow daily to Middle Eastern markets, is becoming a focal point in the proxy war between Saudi Arabia and Iran, and China is the only power with the economic deal-making leverage to keep this from becoming much more than a proxy battle.

The Red Sea port, near the Bab al-Mandab strait, is currently controlled by Yemen’s Shi’ite Houthis, and whoever maintains control of it has a strategic advantage. This port is a pathway connection the Middle East (where the world’s largest proven oil reserves are) and Sub-Saharan Africa (a region expected to see a four-fold increase in energy demand by 2040), making it a coveted geopolitical prize for regional powers, but a livelihood-destroying burden for Yemen’s residents.

The situation reached a new level of tension over the weekend when a helicopter opened fire on a ship en route to Sudan carrying Somali refugees, and killing 42 people. The Saudi-led coalition fighting in Yemen denied responsibility for the attack and suggested that the United Nations is responsible for securing the safety of this waterway. The plea, however, fell on deaf ears, with the UN saying that the warring parties alone are responsible for protecting Yemen’s civilians and infrastructure.

Yemen’s Oil and Port Spoilage Goes to Civil War Victor

To the victor of the proxy war between Saudi Arabia and Iran—aka the Yemeni Civil War—will go the spoils of control of the Bab al-Mandab strait. And a bridge between two of the world’s biggest oil-producing regions is indeed a priceless trophy.

The Sunni coalition fears that if the Houthis gain full and lasting control of this port, they could use it to blackmail their enemies, paralyzing oil trade via the passage.

Holding roughly four billion barrels of oil reserves, Yemen itself makes limited use of the strait compared to the vast potential of the waterway – which sees a thoroughfare of four million barrels of oil a day.

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Yemen shares access to the strait with its massive northern neighbor, but this is not enough for Saudi Arabia, which is threatened by the distribution competition it could face if Iran gets a direct line through the Red Sea port – which is currently in the hands of Shiite fighters.

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Enter China, Stage Right (and Left)

China in 2016 offered support for Yemen’s government, which is backed by a Saudi-led Gulf Arab coalition at war with the Houthi movement, which is backed by Iran and which now controls much of the country.

But this is a tricky balance for China to maintain as it attempts to cut economic and cooperation deals with both sides in this conflict. Beijing is boosting relations right now with both the Saudi royals and Iran.

Full article: Vital Oil Shipping Lane Becomes Target In Yemen’s Civil War (OilPrice)