A Manufactured Crisis: How Saudi Arabia Uses Oil to Bring Yemen to its Knees

By Ahmed AbdulKareem

Source

By manufacturing an oil crisis in Yemen, Saudi Arabia is able to foment political chaos in the country and stir up popular discontent against domestic oil companies, many of which are run by the Houthi-led resistance.

HODEIDA, YEMEN — Yemen’s oil is in thrall to a complex, intertwined network of elites that control the smuggling of fuel imports and new, thriving black markets. Starving Yemen of petroleum products has always been a conspicuous feature of Saudi Arabia’s nearly six-year-long war on the country, however, the most recent blockade is significantly more extensive than previous ones and comes at a time when a pandemic, diseases, and hunger are spreading rapidly across the country. The most recent byproducts of that blockade: the spread of schistosomiasis, a faltering economy in areas outside of Saudi control, and a dangerous new black market.

Known colloquially as snail fever, schistosomiasis is a rare disease caused by flatworms that thrive in untreated water, something now abundant in Yemen as the diesel fuel needed to power many of the country’s water treatment facilities, especially those in rural areas far removed from any electric grid, has dried up amid the blockade.

In a remote village in the Al-Marawa’ah district, Khalid Abdu looks at his thin daughter, 12-year-old Jamilah, with heartbreak as she lies still in the family’s hut. Jamilah is suffering from abdominal pain, diarrhea, and blood in her stool. Khalid said she has worms in her stomach, now distended and bloated in stark contrast to her otherwise meager frame. Jamilah was later diagnosed with schistosomiasis according to her family, leaving her with just three to ten more years of life if she doesn’t receive proper medical care, a luxury in her war-torn country.

Yemen Famine
Hammadi Issa | AP

Near the family’s hut, hobbled together from a hodgepodge of mud, bamboo sticks, thatch, and reed, sits an old Toyota Hilux, its low tires and thin coating of dust a testament to the fact that it hasn’t moved for weeks. Khalid blames the lack of fuel for the family’s endless problems. “I can’t drive my daughter to the hospital in Aden or bring water to my family, even the treatment plant that I used to go to is closed because there is no diesel,” he said. “Now, we drink, wash our clothes and cooking utensils, and do everything using that old well.” You see the result,” he said, pointing to Jamilah.

Another grim milestone

As the war in Yemen closes in on yet another grim milestone, the end of its sixth year in March, oil-rich U.S. ally Saudi Arabia continues to prevent oil tankers from delivering much-needed fuel to hospitals, water pumping stations, bakeries, cleaning trucks, and gas stations, plunging the entire nation into an unending fuel crisis.

The CEO of Yemen Petroleum Company (YPC), Ammar Al-Adrai, told MintPress that at least nine tankers have been trapped in Saudi Arabia’s Jizan Port, which sits on the Kingdom’s western seaboard painfully close to the Yemeni border. The tankers, Al-Adrai says, have been held despite being checked and issued permits by both the Saudi-led Coalition and the United Nations. He confirmed that the vessels are loaded with oil derivatives and that some of them have been detained for over nine months, leading to the suspension of more than 50% of the operational capabilities in the service, health, industrial and commercial sectors. 

That lack of fuel has caused an acute shortage of even the most basic goods. Khalid told MintPress that “the price of fruits, vegetables, and medicine is skyrocketing and my farm is defenseless against desertification.” Like many farmers, Khalid, who like his daughter Jamilah shows symptoms of malnutrition, is unable to power the pumps needed to irrigate his fields, leaving him unable to grow his own food with which to feed his family and the desert sands encroaching on his now derelict fields. At least 80% of Yemen’s 28 million-strong population is reliant on food aid to survive in what the United Nations has called the world’s worst humanitarian crisis and the decimation of the remaining agricultural sector is likely to increase that figure.

“The [Yemeni] government is indifferent and apathetic to the suffering of citizens, even in areas under their control,” Khalid said, accusing the Saudi-backed government of Aden of deliberately compounding the suffering through the proliferation of the black market. “Fuel shortages in the northern provinces are caused by the blockade, but in Aden, we don’t understand what’s going on.”

A manufactured oil crisis

By manufacturing an oil crisis in Yemen, Saudi Arabia is able to foment political chaos in the country and stir up popular discontent against domestic oil companies, many of which are run by the Houthi-led resistance. As a sort of grim bonus, the manufactured oil shortages also to incapacitate the Houthi-run port of Hodeida, increasing poverty and unemployment rates and siphoning cash out of the market, according to the Yemen Petroleum Company (YPC). 

YPC released a statement placing the estimated economic damage caused by Saudi Arabia’s refusal to allow tankers to unload their cargo at billions of U.S. dollars. The company also said that demurrage fees are now at an unprecedented level of nearly $107 million and that Saudi forces have illegally impounded 72 Yemen-bound oil tankers last year, resulting in an approximately 45% drop in the amount of desperately-needed fuel shipments arriving at Yemeni ports. 

The fuel blockade has not only forced thousands of Yemenis to wait for days in lines as far as the eye can see, but it has also left water pumps and treatment plants, and hospital generators without fuel. Most drinking water, particularly in rural areas, is extracted using diesel-powered pumps, while the country’s sizable refugee population survives on water brought in by diesel-powered trucks.

Yemen Fuel Feature photo
Hani Mohammed | AP

Food imports which generally arrive via one of the country’s ports are processed and packaged at diesel-fuel-powered facilities, factories in Hodeida or Aden before being transported across the country or sold locally.

Outside of the country’s coastal cities where more than 60% of the population resides, freight is transported by road leaving remote communities at the mercy of trucks that must traverse roads pockmarked and damaged by airstrikes. The few who are willing to undertake the dangerous journey must contend with the high price and scant availability of fuel, pushing the price and availability of even the most basic commodities – food, water, and medicines – through the roof.

A thriving black market is born

The oil crisis in Yemen certainly isn’t new, but it has been growing worse recently amid a black market boom which is adding to the already miserable quality of life for Yemenis. The Saudi government is flooding southern areas of Yemen under its control with cheap fuel, exacerbating regional tensions and creating an ideal environment for black market petroleum products to boom. The stark disparity between the availability of fuel in Saudi-controlled areas versus areas under Houthi control is also causing predictable economic damage to the ladder, which is unable to compete amid the Saudi-imposed blockade. 

Despite the suffocating siege on the country, petrol products are sold illegally on roadsides, streets, and isolated areas in the south and north of the country alike, often at double the official price with prices in some areas reach 11,000 riyals for 20 liters. These black market petrol products are mixed with water and other materials and enter from Saudi-controlled ports in Aden port and border crossings such as Al-Wadiah outlet, Al-Shahr, and the rich-oil Marib province.

Yemen’s oil is now in large part controlled by a complex network of corrupt officials that control smuggling routes, imports, and black market sales. Many members of these elite groups are also key allies of Saudi Arabia and the UAE. They not only plunder wealth and destroy the economy, but they put people’s lives and property in danger. People are now forced to seek their fuel from shady black market dealers and store fuel in their homes to get them through tough times. Smuggled petroleum products are sold in residential areas and unlicensed storefronts that do not meet security and safety standards and exacerbate the human cost of the crisis.

The crisis is set amid a backdrop of theft of Yemen’s own of crude oil by the Coalition and Saudi-backed militants, a daily occurrence in the Mari and Shabwa Blocks. Recently, Saudi Arabia brought in heavy drilling equipment made to deepen existing oil wells in Hadramout aimed at increasing the rate of oil extraction there.

The effect of the blockade on Yemen is acute, even when compared to countries that are reeling from U.S. sanctions such as Iran, Syria, and Venezuela, where fuel somehow manages to find its way to citizens. Yemen, though, is completely at the mercy of Saudi Arabia, forcing the  Houthi-backed Yemeni Army to step up their oil war against the Kingdom in the Red Sea and putting sensitive oil facilities deep inside Saudi territory at risk of being targeted as they have been in recent years according to the prominent field commander, Major General Yusef al-Madani, the Commander of the Fifth Military Region, the region responsible for Yemeni coasts and territorial waters.

Mass Starvation Looms as Yemen’s Currency Nears Historic Freefall

By Ahmed Abdulkareem

Source

“Yemen is now in imminent danger of the worst famine the world has seen for decades,” — UN Secretary-General António Guterres

TAIZ, YEMEN- – Both Saudi Arabia and the United Arab Emirates seem to be doing everything in their power to prevent an end to the suffering in Yemen. Even those living in areas under the total control of the wealthy Gulf monarchies are facing levels of devastation that harken back to the total destruction of European cities during World War II.

With no functioning government to provide residents with even basic assistance and facing a collapsed economy amid a famine that could soon beset all of Yemen according to the United Nations, the collapse of Yemen’s rial, particularly in Saudi-coalition-controlled areas, is proving to be the coup de grâce that will assure the country faces an apocalyptic level of destruction for years to come.

Her black eyes virtually absent and speaking in a muted voice that is difficult to pick up, Umm Abdu does her best to recount her story to MintPress. She was hiding a bony face and emaciated body in a voluminous black abaya robe and hijab. “I am starving myself to feed my children. It is very difficult to reach for this piece,” the Illiterate mother of six muttered as she held a piece of Roti bread. Umm Abdu lives in a poor neighborhood in Taiz, a city in western Yemen under the control of some of the richest countries in the world.

Yemen famine
Severely malnourished infant Zahra is bathed by her mother in a washtub. Hammadi Issa | AP

After nearly six years of war, Yemen remains home to the world’s largest humanitarian crisis. Millions are hungry and destitute and at least 80% of the population requires humanitarian assistance or protection. Some 13.5 million people face severe food shortages and that number could rise to 16.2 million in 2021, according to International Relief Bodies.

The economy has already collapsed for virtually every Yemeni living in the south, except for the few who managed to profit by working with Saudi Arabia or the UAE. Savings accounts have long been exhausted and by end of November, the rial depreciated to an all-time low of 850 YR to a single U.S. dollar, leaving most of the population unable to afford even the most basic essentials. Like Umm Abdu, people are reducing portion sizes and skipping meals as a kind of “coping strategy index,” one of many tools used to measure food insecurity. Fruit, fish, and meat have become a rare commodity that most can only dream of.

“Even though there is food in the markets, I can’t afford it. Not because we don’t have money, but because of the crazy prices. So we decide to reduce food to keep our children alive,” one shopper told MintPress. However, that strategy may not be enough as food prices are near double where they were in the wake of the recent currency collapse.

According to International organizations, Yemen, particularly areas under the control of Riyadh and Abu Dhabi, will return to alarming levels of food insecurity by mid-2020, and a catastrophic food security crisis is looming. They reported that by December 2020, the population facing high levels of acute food insecurity (what they termed IPC Phase 3 and above) would increase from 2 million to 3.2 million people.

An Integrated Food Security Phase Classification (IPC) report from October 2020 covering southern Yemen highlighted how acute malnutrition rates among children under five are now the highest ever recorded in some districts. The analysis reveals a near 10 percent increase in cases of acute malnutrition this year. The greatest increase is in cases of young children suffering from severe acute malnutrition which has increased by 15.5 percent, leaving at least 98,000 children under age five at high risk of dying without urgent treatment.

Situation Report Yemen 11 Nov 2020 pdf edited
Source: IPC Acute malnutrition analysis (Oct 2020)

A stream of statements from leading aid organization officials reflects how dire the situation has become, including a warning from UN Secretary-General António Guterres that “Yemen is now in imminent danger of the worst famine the world has seen for decades. ”We’ve been warning since July that Yemen is on the brink of a catastrophic food security crisis. If the war doesn’t end now, we are nearing an irreversible situation and risk losing an entire generation of Yemen’s young children,” said Lisa Grande last month,” the Humanitarian Coordinator for Yemen. “The data we are releasing today confirms that acute malnutrition among children is hitting the highest levels we have seen since the war started,” she added.

The Food and Agriculture Organization of the United Nations (FAO) raised the alarm about millions of Yemenis risking falling into worsening levels of hunger by mid-2021. The United Nations World Food Programme (WFP) also described the crisis in Yemen as “the world’s worst.” The WFP said in a tweet that millions are trapped in a cycle of conflict and hunger. “Everyday life in Yemen gets harder for millions as the window to prevent famine narrows. We must act now.”

Although a mass famine event may be unlikely in the immediate future, officials in Taiz warned that many areas could soon start to see deaths from famine. Many children already have signs of severe acute malnutrition, the most dire stage of hunger where legs and feet begin to swell. “We all sleep hungry, there is not enough food even for our children,“ Umm Abdu told us.

For Umm Abdu and her husband, 37-year-old Saeed, the rial’s collapse has meant skipping meals. Saeed was educated as an English teacher and had a job as a tour guide at a local travel agency before the war. Since he lost his job after the war began, he’s been making money selling qat – a mild stimulant that many Yemenis chew in the afternoon. However, that money is not nearly enough to cover rent, let alone basic needs. Now, their situation is getting worse as the availability of Qat has decreased dramatically after the weather turned cold three months ago when winter began. After the recent collapse of the rial, the ability to bring home food has become nearly impossible.

Umm Abdu and Saeed are now considering extreme options. Over the past six years, they have seen Yemen’s steady dissolution from a nation hoping to transition to democracy post-Arab Spring, to a nation fragmented and a land of warring statelets, mass suffering, and despair.  Many of their neighbors have resorted to stealing, human trafficking, and selling their organs to make ends meet, or even marrying off their daughters because they are unable to feed them.

A tale of two cities

Officials in Aden, the de facto center of Saudi-Coalition power in Yemen, blame the collapse of currency on the fact that foreign reserves have dried up. According to them, remittances from Yemenis abroad, the largest source of foreign exchange, dropped by up to 70% as a result of the Covid-induced global downturn. But to Omer, a former fighter in “al-Muqawamah” in Aden who was wounded while fighting with Coalition Forces against the Houthis in 2016, these arguments are grossly inaccurate.

Omer believes that Saudi Arabia has a plan to destroy the national currency in order to intentionally accelerate famine.  “Why is there no collapse of the currency in Houthi areas even though they live in conditions worse than us?” The exchange rate divergence between Houthi-controlled Sana’a and coalition-controlled Aden is indeed stark, with the Yemeni rial worth 35% less in Aden than it is in Sana’a.

Omer was one of the thousands of Yemenis that took the streets in Taiz and other areas this week in a mass protest against the continuing deterioration of the economic situation, denouncing the Saudi-led coalition states and demanding they leave the country. The demonstrators accused coalition countries and ousted Yemeni president Abdul Mansour al-Hadi of practicing a policy of starvation to achieve their personal objectives. They chanted slogans against Saudi Arabia and UAE with phrases like “our revolution is a hungry revolution,” “take your aid, and leave us our oil,” “take your donations, and leave us our ports,” and “take your trust fund and leave us our wealth.”

A gloomy future

According to local economists who spoke to MintPress, the reasons behind the collapse of Yemen’s economy and its currency are many and varied but the expansionary monetary policy that has been taken by Saudi Arabia is one of the key drivers of the Yemeni rial’s devaluation.

Local authorities supported by Saudi Arabia have regularly printed new banknotes in order to meet expenses compounded by the purchase of foreign currencies flowing into markets by foreign organizations.

By the end of 2019, the total rial liquidity in circulation in the country was more than three trillion, according to a source in the Aden-based central bank. As of the beginning of 2020, the bank has printed around 300 billion rials in order to address the budget deficit. The government of ousted president Hadi has largely relied on the central bank’s overdraft financing instrument to cover his spending abroad, including rent, travel, and entertainment.

Recently, Saudi’s proxies in southern Yemen have been selling large quantities of newly-printed banknotes in order to purchase foreign currency from the market and replenish their own foreign currency holdings. This has increased downward pressure on the rial’s value and helped drive inflation.

Secretary-General Antonio Guterres has called on countries to provide financial assistance to resolve the severe economic crisis in Yemen, saying in a statement issued via his spokesperson Stephane Dujarric on the second anniversary of the Stockholm Agreement, “I call on all member states to help address the severe economic crisis in the country.”

Umm Abdu has a gloomy future. She has no faith in the UN or the Saudi proxies in the south, who she described as “drenched in treason.” Nonetheless, she places hope in God and in her fellow Yemenis that her country will be freed. “Where else on Earth can you find a nation that has gone through what has happened in Yemen, occupied by foreigners, destroyed, with famine and epidemics, and yet somehow, we still managed to survive.”

With an Eye on Balkanization, Israel throws Support Behind Separatist Militants in Southern Yemen

By Ahmed Abdulkareem

Source

ADEN, YEMEN — As the war in Yemen nears its sixth year, the situation in the war-torn nation is escalating as Israel enters the fray, throwing its support behind the Emirati-backed separatist militant group, the Southern Transitional Council (STC). The STC has already effectively captured Aden and more recently seized Socotra Island. Israel’s entrance into the already convoluted and crowded theater is likely to open the door for further escalation, particularly in the Red Sea and Bab al-Mandab Strait.

Amid the ever-growing normalization of relations between Tel Aviv and wealthy Gulf Aab states, the Emirati-backed STC, now the de facto authorities in the south of the country, have already established a secret relationship with Israel encouraged by the United Arabic Emirates (UAE) according to informed sources in Aden. Despite strong opposition from leaders inside the STC and from Southern Yemen’s public, the UAE-backed group receives various forms of support from Israel, including weapons and training facilitated by the UAE following secret talks between STC officials and Tel Aviv sponsored by the UAE.

Prior to that, the Deputy Head of the STC Hani bin Breik announced that the group has a willingness to establish relations with Israel, saying “the peace with Israel is “coveted and aspiring” for them. However, he claimed that any relationship with Israel should be within the framework of the Arab peace initiative made by the late Saudi King Abdullah bin Abdulaziz, but he stressed their willingness to establish relations with any country that helps them to “restore their state.”

The development comes after the Warsaw Conference held in February 2019 that ostensibly focused on security in the Middle East. There, Khaled al-Yamani, Yemen’s former foreign minister, executed a very public warming of relations with Israeli Prime Minister Benjamin Netanyahu. In its wake, U.S. peace envoy Jason Greenblatt, who also served as Donald Trump’s personal lawyer and advisor on Israel, remarked that the friendly incident could be the first step in establishing cooperation between Yemen and Israel.

In a related development, Israel’s most widely-read newspaper, Israel Today, claimed that Tel Aviv has been conducting secret meetings with the Emirati-backed separatist Southern Transitional Council (STC), reporting that the STC are “secret friends” to Israel. In fact, that positive attitude towards Israel has been confirmed by the Deputy Head of the STC himself in a video posted on YouTube.

Superficially, Tel Aviv’s support aims to help the STC against the local forces that oppose them, but the fact is that Israel is trying to establish a foothold on the Yemeni Islands in the Bab-El-Mandeb Strait. The Red Sea and Bab al-Mandab are vital interests to Tel Aviv. For their part, the STC needs not only to tighten its control over Yemen’s southern districts and pursue its long-time goal of declaring secession from the north of the country, but they need a gateway to the United States and to the world. Like many Gulf Arab states, the STC has long believed the road to American validation runs through Israel.

STC Yemen Israel HQ

However, southern political leaders who spoke to MintPress realize that relations with Israel will not bring about “an independent state” and that that relationship will be an obstacle in getting public support. Moreover, southerners consider the Palestinian cause to be the cause for all, a situation that STC will not succeed in changing. They say that the Palestine issue is one that concerns Muslims as a whole, something that any local force could never hope to change.

Houthi resistance

Of all Yemen’s myriad political forces, tribes, and military powers, the Ansar Allah-led military, is best prepared, and likely the most willing, to take retaliatory action against both the STC and Israel. Ansar Allah, the political wing of Yemen’s Houthis, are committed to the territorial integrity of Yemen and announced that that they would not hesitate to “deal a stinging blow” to Israel in the case that Tel Aviv decides to involve itself in Yemen.

A high-ranking official quoted the words of Ansar Allah leader Abdulmalik al-Houthi when he threatened Israel in November 2011.” Our people will not hesitate to declare jihad (holy war) against the Israeli enemy, and to launch the most severe strikes against sensitive targets in the occupied territories if the enemy engages in any folly against our people.” In 1956, 1967, and 1973 war with Israel, Yemen successfully closed off the Bab Al-Mandab Strait and prevented Israeli ships from crossing through it.

The National Salvation Government in Houthi-controlled Sana’a accused the United Arab Emirates of providing cover for Israel’s efforts in southern Yemen. “The Israeli enemy sees Yemen as a threat to it,” said Information Minister Dhaifalla Al-Shami, “especially in its strategic location, so it has worked to find a foothold in Yemen through the UAE’s role.” Recently, UAE ambassador to Washington, Yousef Al-Otaiba, said in an article for the newspaper Yediot Aharonot that his country “pushed for initiatives that would have granted Israel privileges.”

Given the fact that the fragmentation of the Middle East is consistent with Israel’s strategy in Yemen, the STC’s, and by extension the UAE’s, relationship with Israel not only violates the Yemeni religious and national constants held firm by nearly all Yemenis, but it is also a threat to the prospect of a unified Yemen. Yemeni political forces, including Ansar Allah, see Israel’s efforts to back the emergence of a break-away separation state in the south as a dangerous game.

In fact, unconfirmed reports allege that Israel participated in the war against Yemen on behalf of the Saudi-led coalition as a part of a series of covert interventions involving mercenary forces, the reported launching of dozens of airstrikes in the country and even the dropping of a neutron bomb on Nuqm Mountain in the middle of the capital city of Sana’a in May of 2015. But any Israeli presence in the south will lead to an inevitable clash with Israel, according to decision-makers in Yemen.

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