CONTENT PREVIEW
Country Risk

Saudi Arabia’s rerouting of crude exports following unconfirmed Houthi attack is likely attempt to seek international military response

07 August 2018

Key Points

  • The lack of evidence provided as to the nature of the attack, and the short period for which Saudi crude exports were rerouted, suggests that, whatever type of vessel was attacked, the Saudi response was intended to elicit an international military response.
  • If the attack attempt on Saudi tankers is confirmed, this would not indicate new Houthi intent or attack capabilities, but would demonstrate their established strategy of targeting critical Saudi and coalition economic infrastructure.
  • If, as the Houthi claim, a Saudi warship was hit, Saudi Arabia may well calculate that its confirmation of the attack would risk emboldening the hard-line faction of the Houthi movement in the run-up to ceasefire negotiations.

Event

On 25 July, the Houthi-run Almasirah TV network claimed that Houthi insurgents had damaged a Saudi frigate, the Al-Dammam, in an unspecified type attack off the Yemeni coast of Hodeidah.

The Saudis denied that a warship had been damaged but the National Shipping Company of Saudi Arabia claimed that the Houthi had attacked two of its ‘very large’ crude carriers, as the vessels transited the Bab al-Mandeb strait en route to Egypt, one was reported to have sustained light damage.

Saudi Arabia's Minister of Energy, Industry, and Mineral Resources, Khalid al-Falih, attending an OPEC meeting on 30 November 2017. (Omar Marques/Anadolu Agency/Getty Images)Saudi Arabia's Minister of Energy, Industry, and Mineral Resources, Khalid al-Falih, attending an OPEC meeting on 30 November 2017. (Omar Marques/Anadolu Agency/Getty Images)

On the same day, the Saudi government announced the temporary unilateral suspension of its oil shipments via the Bab al-Mandeb strait on grounds of safety. The decision was rescinded on 4 August; IHS Markit does not have information as to any risk mitigation measures taken by Saudi Arabia in the interim, but understands that Saudi Arabia made an unsuccessful request for Egyptian naval deployment in the Strait.

Forecast

IHS Markit Country Risk has been unable to verify either attack claim. The available reporting is unusual, in that we have been unable to identify any video or other evidence to support the conflicting accounts. The Houthis have engaged Saudi coalition warships and associated support vessels with anti-shipping missiles and unmanned marine vehicle IEDs in the past, most recently on 13 June, when coalition forces announced that Houthi militants had hit a warship off the Hodeidah coast with an anti-shipping missile.

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