The cessation of oil exports in Yemen has caused the government to incur losses of more than $1 billion per month over the past 8 months, at a time when it is suffering from many financial and economic crises, with the continuation of the state of war and conflict between an internationally recognized government and the Houthi militias that control a number of cities.
This comes amid complaints about the severe financial crisis afflicting Yemen, which is facing one of the worst humanitarian and economic crises in the world, according to a report by the German News Agency, which was reviewed by the specialized energy platform.
Oil exports to Yemen have stopped since October last year, following attacks by the Houthis on a number of oil ports under the control of the internationally recognized government, in the governorates of Hadramout and Shabwa, in the south of the country.
The attacks were met with widespread domestic and international condemnation, while the Houthis stressed that they had only implemented warning messages to prevent the looting of Yemen’s wealth abroad.
Oil production in Yemen
Oil production in Yemen has declined to 55,000 barrels per day, after it was between 150 and 200,000 barrels per day before the war, while it was more than 450,000 barrels per day in 2007, according to official data seen by the specialized energy platform.
The oil and gas sector is the most important source of government revenue in Yemen, as the country relies on crude oil exports to finance 70% of the budget.
The oil sector in Yemen includes proven reserves estimated at 3 billion barrels of oil and 17 trillion cubic feet of gas, according to data from the US Energy Information Administration.
Yemen exports Masilla light sweet crude, with a sulfur rate of 0.51%, and a density scale of 34.10, according to the American Petroleum Institute’s scale, while the volume of its exports of light sweet Ma’rib crude falls below those levels.
Since the failure to extend the truce in October, the Houthi group has launched attacks on 3 oil ports, namely Al-Dabbah, Al-Nashima and Qena in the southeastern provinces of Hadramout and Shabwa, to prevent the export of oil in Yemen, which led to the cessation of government oil revenues and fuel flows and exacerbated the human suffering in the country.
The Yemeni government has warned, on more than one occasion, of catastrophic economic consequences as a result of the continued halt in oil exports, calling for international pressure on the Houthis to stop their attacks on oil ports, according to the London-based Al-Arab newspaper.
Yemeni Prime Minister Maeen Abdulmalik had confirmed during a meeting in the interim capital, Aden, on May 24, that the government bears heavy burdens due to the economic impact of the Houthi attacks on the oil sector in Yemen, its continued plundering of revenues and the deepening of the suffering of citizens in its areas of control.
Abdulmalik referred to the financing challenges facing the government in implementing its obligations, with the decline in public revenues as a result of the Houthi targeting of oil export ports, and its impact on efforts to improve services.
billion dollars losses
Yemen’s permanent representative to the United Nations, Abdullah Al-Saadi, said that his country lost one billion dollars due to the cessation of oil exports, which was intended to improve public services and pay salaries in all parts of Yemen.
Al-Saadi warned during an open discussion session in the UN Security Council recently of the repercussions of depleting the ability of the Yemeni government to withstand due to the contraction of the national economy in half as a result of the war.
Al-Saadi called on the international community to put pressure on the Houthis to stop their violations and looting of the capabilities of the Yemeni people, targeting vital installations and infrastructure, and committing to calm, as it is a humanitarian priority.
The UN envoy to Yemen, Hans Grundberg, had expressed his concern about the deteriorating economic situation in the country, the restrictions imposed on movement, and the consequent impact on economic activity and people’s lives.
During a briefing to a session of the UN Security Council, on May 18, Grundberg stated that the government’s inability to export oil in Yemen, which represented more than half of the total government revenues last year, puts pressure on it that affects the fulfillment of its obligations to the people.
The deterioration of economic conditions
The cessation of oil exports in Yemen led to the recognized government losing an important monetary resource, which caused the continued decline of the Yemeni riyal against foreign currencies.
The riyal is witnessing its lowest decline in more than a year, as the price of the dollar reached more than 1,300 riyals, which led to a rise in prices and a direct impact on the lives of Yemenis.
The Houthis repeatedly take military and political measures to pressure the government to make more concessions in any future negotiations.
The Houthis also require the government to pay all salaries of employees in Sana’a and other governorates under the group’s control, in return for allowing oil to be re-exported in Yemen.
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