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The oil markets certainly remember September 14, 2019, when Yemen’s Iran-backed Houthis launched a drone attack on Aramco oil facilities in Eastern Saudi Arabia, cutting Saudi oil production in half – or taking some 5% of global supply off the market. The attack destabilized global financial markets, even if only briefly. Now we see the specter of a Houthi threat to Saudi oil re-emerge with the failure to renew a ceasefire in Yemen last week. The truce expired on October 2nd after having been extended twice in the past. Already, violence has returned. Last weekend saw what has been described by Yemeni media as a “massive explosion” near a Canadian oil company’s operations in Yemen, though the cause of the explosion remains unknown, including whether the Houthis were behind it or it was the result of some other dispute. Regardless, the factions fighting in Yemen are all on edge now, waiting for the other shoe to drop. We also saw a Houthi drone attack on Yemen’s Al-Dhabba oil port in Hadramout last Friday, which the Saudis have described as “an escalation” of violence after the truce expired. The attack saw two drones launched at the port, timed for the […]
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