In May, the Yemeni Ministry of Oil attributed the country’s fuel crisis to a shortage of cash to pay its imported fuel bill.
“Yemen has the highest fuel subsidy in the Middle East and North Africa region, constituting up to 9 per cent of the country’s GDP,” a statement on the ministry’s website.
Months of fighting between Houthi rebels and a military coalition led by neighbouring Saudi Arabia has starved Yemen of fuel, leaving residents and aid workers stranded — people can’t get to work, the injured can’t be taken to hospitals, authorities can’t run basic services such as water supplies.
$14 a gallon is the price of fuel in the black-market, five times the pre-conflict rates.
Only 20% of the fuel Yemenis need to transport food, run their water systems, and treat their sick is getting through. The crisis is so acute, said Oxfam’s country director in Yemen, Phillipe Clerc, that “shortages could kill more people than bullets or bombs”.
Oil that flows in…
Though a relatively small oil player by Middle East standards, Yemen produced more than 440,000 barrels a day before the 2011 anti-government protests. With Yemen’s oil infrastructure crippled after the repeated air attacks that began late March and with oil companies pulling out, the country has been increasingly dependent on imports.
With Houthi rebels in control of the key Hodeidah port, the second biggest in the country after Aden, and with many of the Saudi airstrikes concentrated on these parts, a key oil supply route has been choked.
About 300,000 tonnes of the fuel come into Yemen every month. But at the end of June, the UN estimated that Yemen was getting only 11 per cent of that fuel.
… and out
What makes the crisis worse is the smuggling out of subsidised fuel from the country. Ports in Yemen such as Mocha are known transit points for smuggling diesel – smugglers buy diesel at low prices from the western regions of the country where it is heavily subsidized and travel with it to ships waiting in the international waters that buy the diesel at higher rates.
Residents and fishermen in al-Khokha, a small port near Hodeidah in western Yemen, said planes of the Saudi-led alliance struck two boats used by Indians to smuggle “badly needed fuel supplies” into the country.
YEMEN ON THE OIL MAP
The country shares a long border with Saudi Arabia, the world’s top oil exporter. The Bab el-Mandeb strait, one of the busiest oil routes, is to the south of Yemen. It is a strategic route for the movement of crude from the Middle East to Europe and the US. About 3.8 million barrels a day of petroleum passed through the strait in 2013, according to the US Energy Information Administration. The fighting in Yemen has raised fears that the Houthi rebels could cut off the straight. If that happens, tankers in the Persian Gulf will have to take the circuitous route around the southern tip of Africa to get to the Suez Canal.