Yemen: Competition for oil sales threatens vessels
A port in Yemen accused of facilitating illegal oil sales. (Image: Maxar Technologies )
4 November 2022
The redistribution of oil funds in Yemen has continuously been a point of dispute in Yemeni politics. As a result of the breakdown of the republican order, various factions have been competing for control of that income. In the meantime, several IED attacks on convoys escorting oil from one area to another resulted in fatalities, associated with parties claiming oil revenues.
By Kais Makhlouf, Middle East & North Africa Analyst
The 21 October attack against Ash Shihr terminal in southern Yemen came as a surprise to many. In reality, it is the culmination of several months of tensions and fighting among Yemeni factions for control of the income generated from the sale of the country’s oil. Yemeni rhetoric on the issue has become increasingly aggressive, as factions accuse other of enabling laundering and smuggling by allowing the sales of oil to continue. Likewise, the energy crisis elsewhere in the world has pushed states and traders to consider buying oil and gas from terminals, such as Balhaf, that previously had been written off as too dangerous. This was visible in the French Ambassador to Yemen’s visit to Mukalla, where he reportedly showed interest in security arrangements that would allow Yemeni hydrocarbon to flow through the Balhaf terminal again.
The redistribution of oil money in Yemen has always been a point of contention in Yemeni politics, even before the war. With the breakdown of the republican order, the various factions have been competing for control of that income. Provincial heavyweights have constructed illegal ports able to export oil, circumventing the central authorities. Various factions, including the Houthis, have laid claim to the country’s oil wealth, with many groups willing to inflict damage to prevent the sale of oil that would not generate income for themselves. In October 2020, an unclaimed attack on the Bir Ali terminal, some 140 kilometres to the west of Ash Shihr also caught a vessel by surprise, and was linked to the same dynamic.
More recently, following a summer build-up of tensions in southern Yemen, a number of minor inland attacks led to deaths and material damage near oil infrastructure in Yemen in August and September 2022. Convoys escorting oil from one province to the other were attacked by IEDs, leaving several dead, and there were several attacks on buildings housing fighters associated to parties laying claim to the oil income. As ever in Yemen, this was part of a more complicated web of conflicts. Ash Shihr’s hinterlands straddling Hadramawat and Shabwa are in the throes of conflict between various UAE-backed militias and exponents of the local Muslim Brotherhood party, Islah. All of these groups, as well as the Houthis, have laid claim to the oil sale, and have sought to impede a trade that does not benefit them.
Indeed, there are significant uncertainties around the sale of Yemeni oil. The ultimate beneficiary of the oil sales, the legitimacy and legality of any single actor in selling away, or purchasing, Yemeni fossil fuels. Several actors, again including the Houthis, have threatened the oil trade, saying that the sale of oil was spoliating Yemenis from their country’s wealth. The Houthis themselves claimed the Ash Shihr attack and have sought to prevent traders from lifting Yemeni crude. It seems as though future oil sales will have to take into consideration the Yemenis fighting for control of their oil.
RELATED CONTENT:
Risk Intelligence provides different whitepapers on subjects of interest for our maritime audience. Check out our whitepapers and hot topic special reports on key supply chain security issues.
Dive deep into the potential scenarios for peace in Yemen and get a complete picture of how they will impact maritime security; request our dedicated piece on Yemen and receive a comprehensive summary of the impact on maritime trade in the Bab el Mandeb.