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The initiation of military operations by Saudi Arabia and its allies in Yemen sparked a rally in crude oil prices. The Saudi led Gulf Arab allies of nine countries continued its airstrikes against the rebels Shiite Houthi, who seized major parts of Yemen. The idea of Iranian proxy authority in Yemen is not at all acceptable by many nations particularly, Iran’s biggest rival, Saudi Arabia. Yemen has become the new battleground in the competition for establishing superiority between Iran and Saudi Arabia. Earlier in 2009, Saudi Arabia took action against the rebel Houthis and used airstrikes thereby supporting the then President Ali Abdullah Saleh, but was unable to calm them.
The intervention of Saudi Arabia in Yemen’s turmoil has stimulated the chances of expanding the already existing civil war into a major conflict between Iran and Arab states. Saudi led Decisive Storm operations on 25 March 2015, resulted in numerous airstrikes with the objective to stop Houthi militants on the Arden port and to protect Yemen’s President Abd-Rabbu Mansour Hadi. In addition, there were several strikes in Yemen’s capital Sanaa.
In the middle of increasing discontent over intermediate government of President Abd Rabbu Mansour Hadi, the rebel group Houthis took complete control of Sanaa. This government was formed as a result of UN backed deal facilitated by Gulf Cooperation Council to end the revolution against the nation’s leader, Ali Abdullah Saleh. In the beginning of March, the government resigned but Hadi absconded to Aden after fleeing from Houthi’s house arrest in Sanaa and declared Aden as temporary capital of Yemen. The sudden collapse of Yemen’s political order created a power vacuum, which served as a boon to revolutionary groups.
A 20 miles wide strait, Bab-el-Mandeb located at the southern part of Yemen separates the nation from Djibouti, an African country. This strait regulates the access to the Suez Canal and Red Sea and also controls the transportation of nearly 3.8 million barrels of oil per day. The rising instability in Yemen threatens the oil that accounts for almost 4% of global oil supply. The foreign involvement has further aggravated this risk of fuelling of conflict among the Arab nations. This upsurge in oil prices indicates the interconnection of energy industry and how crude oil prices are influenced by events such as the US political concerns, Middle East military conflicts and the economic condition of Europe and China.
The crude oil shipping to Asia are not directly affected but the shipping routes to Europe could be, to some extent. Arab oil producers including, Saudi Arabia, Kuwait, Iraq and the United Arab Emirates need to pass Yemen’s coastlines through the Gulf of Aden in order to reach the Red Sea and Suez Canal leading to Europe. Nearly 20,000 merchant ships pass through the strait every year. The Yemen’s unrest has led the US special military to withdraw its forces in the beginning of March thereby declining its counterterrorism efforts in a nation having a stronghold for Al Qaeda.
The intervention of Saudi Arabia in Yemen’s turmoil has stimulated the chances of expanding the already existing civil war into a major conflict between Iran and Arab states. Saudi led Decisive Storm operations on 25 March 2015, resulted in numerous airstrikes with the objective to stop Houthi militants on the Arden port and to protect Yemen’s President Abd-Rabbu Mansour Hadi. In addition, there were several strikes in Yemen’s capital Sanaa.
In the middle of increasing discontent over intermediate government of President Abd Rabbu Mansour Hadi, the rebel group Houthis took complete control of Sanaa. This government was formed as a result of UN backed deal facilitated by Gulf Cooperation Council to end the revolution against the nation’s leader, Ali Abdullah Saleh. In the beginning of March, the government resigned but Hadi absconded to Aden after fleeing from Houthi’s house arrest in Sanaa and declared Aden as temporary capital of Yemen. The sudden collapse of Yemen’s political order created a power vacuum, which served as a boon to revolutionary groups.
A 20 miles wide strait, Bab-el-Mandeb located at the southern part of Yemen separates the nation from Djibouti, an African country. This strait regulates the access to the Suez Canal and Red Sea and also controls the transportation of nearly 3.8 million barrels of oil per day. The rising instability in Yemen threatens the oil that accounts for almost 4% of global oil supply. The foreign involvement has further aggravated this risk of fuelling of conflict among the Arab nations. This upsurge in oil prices indicates the interconnection of energy industry and how crude oil prices are influenced by events such as the US political concerns, Middle East military conflicts and the economic condition of Europe and China.
The crude oil shipping to Asia are not directly affected but the shipping routes to Europe could be, to some extent. Arab oil producers including, Saudi Arabia, Kuwait, Iraq and the United Arab Emirates need to pass Yemen’s coastlines through the Gulf of Aden in order to reach the Red Sea and Suez Canal leading to Europe. Nearly 20,000 merchant ships pass through the strait every year. The Yemen’s unrest has led the US special military to withdraw its forces in the beginning of March thereby declining its counterterrorism efforts in a nation having a stronghold for Al Qaeda.
