Divide and Rule—Saudi Arabia, Oil and Yemen

pipelines_to_hormuzDivide and Rule: Saudi Arabia, Oil and Yemen

(June 2, 2015)

Saudi Arabia does not want a strong, democratic country on the other side of the more than 1500 kilometer long border that separates both countries. It opposed the unification of former North- and South Yemen in 1990. It supported, together with Kuwait, the Southern separation movement during the Civil War of 1994 with billions of dollars. And it heavily influenced the outcome of the Yemeni transition process after 2011.

At the onset of his reign on January 23, 2015, King Salman bin Abdulaziz appointed his son Mohamed bin Salman (34) as Minister of Defense. Saudi Arabia, supported by others, started the airstrikes on Yemen at the request of its (il)legitimate President Abd Rabbu Mansour Hadi on March 25 of this year. Five weeks later, the highly experienced and thoughtful Saudi minister of Foreign Affairs (Prince Saud Al Faisal) was replaced by the former Saudi ambassador to the US (Adel bin Ahmed Al Jubeir). At the same time Aramco, the Saudi oil- and gasgiant, was restructured. The Supreme Petroleum Council was abolished and a Supreme Council established, to be chaired by the Minister of Defense. The influential minister already happened to be the Chairperson of the Economic and Development Affairs Council. These developments cannot be seen as separate from the attack on Yemen.

The energy sector is responsible for 90% of the export earnings and 45% of Saudi BNP. Regional security is therefore of crucial importance, In 2013 30% of all oil transported over sea (from Saudi Arabia, Kuwait, Bahrain, the UAE and Iran) passed the Hormuz Strait, passing the territorial waters of Iran and Oman. 85% of this oil is intended for Asia. Gas too is an important export product, in particular for Qatar.

Fear of an Iranian blockade of the Hormuz Strait, and the possibly disastrous results for the global economy, has existed for years. The US therefore pressured the Gulf States to develop alternatives. In 2007 Saudi Arabia, Bahrain, the UAE, Oman and Yemen jointly launched the Trans-Arabia Oil Pipeline project. New pipelines were to be constructed from the Saudi Ras Tannurah on the Persian Gulf and the UAE to the Gulf of Oman (one to the Emirate of Fujairah and two lines to Oman) and the Gulf of Aden (two lines to Yemen). In addition Kuwait could be connected to this network. So far, only the connection between Abu Dhabi and Fujairah (both UAE) has been completed. It became operational in 2012.

Arabpipeline
Blueprint Regional Network August 2007

Recent overtures between the US and Iran have led to heightened uncertainty among the Saudi’s about the Hormuz Strait. In 2014 Iran and Oman signed an agreement to construct a pipeline from Iran to Oman in order to export Iranian gas to Oman. Distrust about the intentions of Oman increased the attractiveness of the Hadramaut option in Yemen, a longstanding wish of Saudi Arabia.

However, former Yemeni President Ali Abdullah Saleh (in function from 1978-2012) opposed the construction of a pipeline under Saudi control over Yemeni territory. For many years the Saudi’s invested in tribal leaders in the hope to execute this project under Saleh’s successor. The 2011 popular uprisings by demonstrators calling for democracy upset these plans.

When the situation really became untenable the Gulf States, under the watchful eyes of the US and the EU, convinced Saleh to step down in exchange for immunity. His Vice-President Hadi would take over the presidency until the planned presidential elections. De facto, the existing system was kept intact. The subsequent National Dialogue led to the decision to form a federal state with six countries. The governorates of Hadramaut, Shabwa and al Mahra were to come together in a new state called Hadramaut. When asked last year, the current Yemeni minister of Information Mrs. Nadia Sakkaf (residing in Riyadh) could not explain how that decision was reached: one day it had simply been made. The new state of Hadramaut counts 4 of the 26 million inhabitants of Yemen, 50% of the land area, 80% of the oil exports and – contrary to large other parts of Yemen – a sufficient water supply. In addition, a gold reserve worth 4 billion US dollars has recently been discovered.

After the signing of the Jeddah Agreement concerning the border between both countries in 2000 Saudi Arabia initiated the construction of a three meter high wall along the border from the Red Sea. This wall has not yet reached Hadramaut. The governorate of Hadramaut is one of the few areas where the Saudi-led coalition did not conduct any airstrikes. The port and the international airport of Al Mukalla are in optimal shape and under the control of Al Qa’eda. Moreover, Saudi Arabia has been delivering arms to Al Qa’eda, who is expanding its sphere of influence.

Those pipelines to Mukalla will probably get there eventually.

©2015 Joke Buringa

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