War in Yemen could threaten one of the world's most important oil choke points

Oil prices are surging after Saudi Arabia began a military operation against Iranian-supported Houthi rebels in neighbouring Yemen:

Yemen isn’t a world-shaking oil producer, churning out a mere 133,000 barrels a day in 2013. Prices may have been jolted by the strong possibility that Saudi Arabia, which produces 11.6 million barrels a day, is entering in a risky military conflict.

The situation in Aden, a strategically decisive port city on Yemen’s southern coast, was so bad that president Adb Rabbu Mansur Hadi reportedly had to flee the city, and the country, by boat rather than by air.

This means that Houthi rebels are contesting areas along the Bab el-Mandeb, the straights at the opening of the Red Sea and one of the world’s crucial oil choke points.

According to the US Energy Information Administration’s (EIA) fact-sheet on global oil choke points, 3.8 million barrels of oil and “refined petroleum products” passed through the Bab el-Mandeb each day on its way to Europe, Asia, and the US, making it the world’s 4th-busiest choke point.

The straight controls access to multiple oil terminals and to a oil pipeline co-owned by state companies from Egypt, Saudi Arabia, the United Arab Emirates and Qatar that transits oil between the Red Sea and the Mediterranean Sea, called the Suez-Mediterranean or SUMED pipeline.

The Bab el-Mandeb is 18 miles wide at its narrowest point, “limiting tanker traffic to two 2-mile-wide channels for inbound and outbound shipments,” according to the Energy Information Administration.

Yemen oil chokepointBusiness InsiderOil infrastructure around the Bab el-Mandeb

The closure of the straights — or the perception of added risk of closure — could have huge consequences for the global oil market.

“Closure of the Bab el-Mandeb could keep tankers from the Persian Gulf from reaching the Suez Canal or SUMED Pipeline, diverting them around the southern tip of Africa, adding to transit time and cost,” the EIA fact-sheet explains. “In addition, European and North African southbound oil flows could no longer take the most direct route to Asian markets via the Suez Canal and Bab el-Mandeb.”

Sudan and South Sudan would also have their only oil terminal cut off from Asia-bound trade, as the countries’ shared pipeline terminates in Port Sudan. And it would cut off Indian Ocean access to the Mediterranean sea as well as the SUMED pipeline, which can transit 2.24 million barrels of oil per day — more than the daily output of all but 13 of the world’s countries.

The warships USS Iwo Jima and USS Fort McHenry are on standby in the Red Sea and “are ready to respond to the rebel uprising in Yemen,” according to the Department of Defence.

There’s no sign of the Bab el-Mandeb being compromised as yet. But the choke-point’s global significance may explain why the oil market has found events in Yemen so alarming.

Bab el-Mandeb REUTERS/U.S. Navy/Mass Communication Specialist 3rd Class Daniel J. MeshelThe aircraft carrier USS Enterprise and the guided-missile cruiser USS Vicksburg transit the Bab el-Mandeb Strait in this April 7, 2012 handout photo courtesy of the U.S. Navy. The Enterprise, which was christened in 1960, will be inactivated during a ceremony at Naval Station Norfolk on December 1, 2012.

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