Saudi Arabia suspends crude oil shipments through Bab al-Mandab

Saudi Arabia’s Energy Minister Khalid al-Falih said the kingdom would halt all oil shipments through the strait immediately and the suspension will last “until the situation becomes clearer."

By SHAUL SHAY
View of the Red Sea port of Hodeidah, Yemen June 24, 2018 (photo credit: REUTERS/ABDULJABBAR ZEYAD)
View of the Red Sea port of Hodeidah, Yemen June 24, 2018
(photo credit: REUTERS/ABDULJABBAR ZEYAD)
Saudi Arabia temporarily suspended all oil shipments through the Bab El-Mandeb Strait after two Saudi Very Large Crude Carriers (VLCCs) came under attack by Yemeni Houthi militia on July 25.
The vessels, each carrying two million barrels of oil, belong to the Saudi National Shipping Co. The attack resulted in minor damages to the tanker named Arsan and the ship was escorted to the Saudi port of Jizan, accompanied by the Saudi frigate HMS Al-Dammam.
The Houthi-run Al-Masirah TV network reported rebels targeted a warship named the Dammam off the western coast of Yemen. The rebels later said they launched a missile attack on the vessel.
The Bab Al-Mandab Strait, one of the world’s busiest shipping routes, connects the Red Sea with the Arabian Sea. It is one of the world’s key shipping lanes for crude oil and other petroleum products. According to the US Energy Information Administration, around 4.6 million barrels of crude and refined petroleum exports per day flowed through the Strait in 2016, headed to Europe, Asia and the United States.
Saudi Arabia’s Energy Minister Khalid al-Falih said the kingdom would halt all oil shipments through the strait immediately and the suspension will last “until the situation becomes clearer and the maritime transit through Bab al-Mandeb is safe.”
This attack in the Red Sea falls in line with previous attacks conducted by the Houthi group against Saudi oil tankers (January, April and May 2018). The group has used anti-ship missiles, unmanned maritime vehicle-borne improvised explosive devices and sea mines to attack Saudi coalition ships, as well as US warships and oil tankers.
Saudi Arabia has been fighting with the Houthi militia in Yemen, backed by Iran, for more than three years. On June 13, 2018, Yemeni government forces, backed by the Saudi coalition, launched a wide-ranging operation to retake Hodeidah and its strategic seaport from the Houthis. Government forces continued to advance towards the city and on June 19, 2018, seized Hodeidah’s international airport. The coalition has called a halt to the offensive to give UN efforts a chance to reach a political solution that would avert an assault on the port, a lifeline for millions of Yemenis, which the United Nations fears risks triggering a famine in the impoverished country.
Yemen’s armed Houthi movement threatened to block the Red Sea shipping lane if the coalition keeps pushing toward the Houthi-controlled port of Hodeidah. On January 8, 2018, Saleh al-Samad, the head of the Houthi rebel government, told a visiting UN delegation that his group could “turn to strategic options… including cutting off the Red Sea and international navigation” if the coalition continued to threaten Hodeidah, the only major port under its control.
Saudi Arabia and the United Arab Emirate’s main justifications for the intervention in Yemen was to protect shipping routes such as the Red Sea, which is used to bring Middle Eastern oil and Asian goods to Europe through the Suez Canal. The Saudi coalition has repeatedly accused regional rival Iran of arming the rebels and raised alarm that Houthi rebels threaten vessels in the Red Sea through their control of the strategic Hodeida port.
A full closure of the Bab Al Mandab strait would force tankers sailing from Saudi Arabia, Kuwait, Iraq, the United Arab Emirates to go around the southern tip of Africa, which would add to transit time and cost.
Much of the crude oil that leaves Saudi Arabia to the northwest via the Suez Canal and the SUMED pipeline is first shipped through the Bab al-Mandeb Strait, which passes close to Yemen. Saudi Arabia can still use its East-West mega-pipeline to ship crude oil from its oil fields in the Persian Gulf into the city of Yambu on the Red Sea, bypassing the strait and keeping the European market within regular reach. The East-West pipeline has a capacity of about five million barrels a day.
Iran’s backing of the Houthi rebels necessarily raises comparisons between the Bab al-Mandeb situation and the significant chokepoint in the Persian Gulf’s Strait of Hormuz. This attack is linked to recent Iranian threats to close the Strait of Hormuz, through which tankers carry 18 million barrels per day if Iranian oil exports are banned under the US sanctions expected to be implemented on November 4.The new development is believed to be an Iranian involvement in threatening the maritime movement by encouraging the Houthis to attack oil tankers in the Red Sea. Iran is watching how the Trump administration and the Saudi coalition respond to the incident.
Ensuring the free and safe movement of oil is important for all consumers and producers. Houthi forces will be able to threaten international shipping as long as they control any part of Yemen’s Red Sea shoreline. The message of Saudi Arabia is that the current threat of the Iran-backed Houthis is not a local or a regional problem but a global challenge and the world powers should take the necessary steps to ensure the safety of this vital waterway.
The writer is the director of research of the Institute for Policy and Strategy at the Interdisciplinary Center Herzeliya and former deputy head of the National Security Council.