Saudi Arabia halts oil exports via Red Sea after Yemeni retaliatory attacks

27 July, 2018, 21:41 | Author: Shannon Aguilar
  • Iran-backed Houthis hit Saudi oil tanker off Yemen coast

"Saudi Arabia is temporarily halting all oil shipments through Bab al-Mandeb strait immediately until the situation becomes clearer and the maritime transit through Bab al-Mandeb is safe", Saudi Arabia's Energy Minister Khalid al-Falih said in a statement.

In the wake of halting Saudi oil shipment through Bab al-Mandeb following the Houthi militias attack on Wednesday on two Saudi oil tankers, the Kingdom still has another option represented by the major oil terminal in Ras Tanura - also home to the country's largest refinery - on its eastern coast.

The pro-Houthi al-Masirah television station stated that the Houthis had targeted a Saudi warship; however, the Saudis and the Yemeni government said it was tankers that were attacked.

Despite human rights concerns and reports of serious violations of worldwide law by members of the Saudi-led coalition in the Arab country, South Africa and several Western countries have been supplying Saudi Arabia with advanced weapons and military equipment.

The Yemeni government has strongly condemned Houthis' attack on two Saudi oil tankers in the Red Sea, Saudi Press Agency (SPA) said Thursday night.

As for the Gulf states, they have discussed contingency plans previously in 2012 and 2013 in the event of a Strait of Hormuz closure.

"The attack is an act of terrorism that has threatened regional security and peace", he said in a statement. Sailing from the Persian Gulf, this Red Sea route is 43 percent shorter than sailing around the continent of Africa, making it the most affordable route and saving shipping companies millions of dollars.

Saudi Arabia also has a pipeline route to the city of Yanbu on the Red Sea keeping Europe and North America well supplied - the 5-million-bpd Petroline.

Attacks on shipping and Saudi, UAE naval vessels have been fairly common in the Red Sea, since the start of the war in Yemen in 2014.

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Any move to block the strait would virtually halt oil shipments through Egypt's Suez Canal and the SUMED crude pipeline linking the Red Sea and Mediterranean.

An estimated 4.8 million barrels per day of crude oil and refined products flowed through the Strait in 2016 towards Europe, the Americas and Asia, according to the US Energy Information Administration. The state-owned Saudi Aramco oil company said no one was injured in the attacks and that no oil spilled, but the halt in shipments caused oil prices to increase worldwide. It has said that it foiled previous attacks in the Red Sea in April and May.

A breakthrough in US-EU trade talks also lent support to oil prices.

Yemen´s government, in a statement Thursday carried by the state-run Saba news agency, condemned the attack on shipping and urged the global community to "immediately stand with and support" the coalition in its fight against the Huthis.

Oil expert Kamel al-Harbi said in an interview with Al Arabiya news channel that the importance of Bab al-Mandeb is that it save time and cost.

The United Nations says the Houthis have offered to hand over management of the port to the world body, but the Saudi-led coalition says that the Houthis must quit the western coast.

At least 10,000 people have been killed and thousands others wounded in the conflict in Yemen, one of the world´s most impoverished nations.

James Dorsey, an expert on Middle East affairs, said the attacks on oil tankers would draw worldwide attention to Yemen.

Oil prices are already high and it is not in the interests of the USA to see them go any higher.

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