Saudi Arabia and Yemen: the future and the issues to be resolved
If only Yemen were stable, Saudi Arabia would already have a reliable alternative to the Strait of Hormuz for exporting 80 per cent of its crude oil to Asia. Perhaps even two. But that is not the case. Yemen’s instability is increasingly shaping Riyadh’s infrastructure strategies: a paradox for a country – the only republic on the Arabian Peninsula – which, since 2022, has been forced to halt its (limited) oil exports under threat from the Houthis. Now, after four years of a national truce, the ‘Saudi pax’ in Yemen is showing increasing signs of crumbling, from north to south. Yet the country has never been so strategically important to the Saudis.
Whilst Israel and the United States were bombing Iran, Saudi Arabia continued to export oil via the Red Sea East-West Pipeline (Yanbu) because the Yemeni Houthis, backed by Tehran, had not resumed attacking ships between the southern Red Sea and the Strait of Bab el-Mandeb. Had they done so, or were they to do so now that the Strait of Hormuz is still operating ‘in fits and starts’, the impact on exports – and therefore on Riyadh’s finances – would be significant. For Saudi Arabia, the East-West Pipeline remains the primary alternative to the Strait of Hormuz. Riyadh is reportedly considering boosting the pipeline’s capacity, in a move similar to that of the United Arab Emirates regarding the Habshan–Fujairah pipeline – the ‘beyond Hormuz’ pipeline that will double export capacity by 2027. The Saudi pipeline to the Red Sea can handle up to 7 million barrels of crude oil per day (it currently transports less than 5 million for export and around 2 million for domestic consumption): Riyadh’s aim is to add up to 2 million barrels of additional daily capacity, in order to also transport some of the crude oil from neighbouring Kuwait, which has no maritime alternatives and is therefore dependent on Hormuz.
Saudi oil tankers departing from Yanbu must pass along the Yemeni coast: but the political and military situation in the country is deteriorating, with local and regional dynamics becoming increasingly intertwined. The clash between Yemeni government forces and Houthi militants has claimed around 70 lives: it is the deadliest since 2022. The Houthis had previously threatened to target airports and infrastructure in Saudi Arabia after the Saudis allegedly attempted to prevent an Iranian civilian aircraft from landing in Sana’a. However, Yemen’s instability also stems from the south: another factor that directly impacts Riyadh’s infrastructure strategies. For years, pro-Emirati and pro-Saudi groups have been fighting each other in southern Yemen: the former seeking secession, the latter seeking to preserve the country’s unity. When the secessionists suffered a heavy defeat at the start of the year, Saudi Arabia became the dominant power in the south – which, incidentally, is the half of the country not controlled by the Houthis. And an old Saudi plan has resurfaced: to build an oil pipeline carrying Riyadh’s crude directly to the Arabian Sea, passing through south-eastern Yemen. Thus bypassing both Hormuz and Bab el-Mandeb in a single move.
The fact that Riyadh intends to connect the three Yemeni regions in the area (Shabwa, Hadramawt and Mahra) to its own electricity grid has since helped to revive the proposal, for which the Saudis were drawing up a feasibility study in 2018. The idea of a Saudi-Yemeni corridor was then blocked by hostility from the local tribes of Mahra, who have ties to neighbouring Oman: they feared their territory would become a Saudi ‘protectorate’. Even during Ali Abdullah Saleh’s presidency, the tribes used to attack oil pipelines to protest against the government. Now Riyadh is reportedly pushing for the pipeline once again, this time in Hadramawt, thanks to patronage ties strengthened following the defeat of the pro-Emirati factions. And thanks to the economic dependence of the recognised Yemeni government: it is Saudi Arabia that now pays public sector salaries, including those of the military (and militias). The pipeline, however, will probably remain on paper. In addition to local hostility, there is a major political sticking point: the secessionist movement is re-emerging on the streets, yet Riyadh continues to postpone the South-South Dialogue it had promised to discuss greater autonomy for the southern regions. Once again, Yemen’s instability, from north to south, will weigh heavily on the Saudis’ infrastructure strategies.
(*) Senior Research Fellow at ISPI, lecturer at ASERI
