Power plants, oil terminal targeted
Escalating conflict raising risks to Middle East energy supplies
Shipping in the region already heavily affected by Houthi attacks
Oil storage and energy infrastructure at the Red Sea ports of Hodeidah and Ras Isa in Yemen were attacked and set ablaze Sept. 29 by the Israeli military.
Not registered?
Receive daily email alerts, subscriber notes & personalize your experience.
“Through the infrastructure and ports that were attacked, the Houthi regime transports Iranian weapons to the region, and supplies for military purposes, and thus oil,” the Israeli military said in a statement following the attacks.
In a note, security consultancy Ambrey said seven merchant vessels were observed in Hodeidah and two in Ras Isa when the incident took place.
A Panama-flagged tanker moored at Ras Isa at the time of the attack has been subject to an investigation by nonprofit United Against Nuclear Iran over alleged Iranian trade, according to the note.
The attacks come after a major campaign to attack commercial shipping in the Bab al-Mandab Strait carried out by Houthi rebels, causing major disruption to oil supplies in the region. The attacks started after Hamas attacked Israel Oct. 7, 2023, triggering retaliatory attacks from Israel. Houthi attacks have led many shipping companies to reroute shipments around Africa, which takes significantly longer and is more expensive.
S&P Global Commodity Insights estimates that supplies of crude, condensate and refined products through the Bab al-Mandab were around 3.3 million b/d in the first half of 2024 – half the average daily volume of 2023 supplies.
Regional conflicts
Tensions in the Middle East have escalated in recent days with Israeli attacks on Lebanon, including the assassination of Hezbollah leader Sayyed Hassan Nasrallah Sept. 28.
The recent events “are bullish for global oil price sentiment” and the “risk of conflict escalation remains a key concern,” especially if Iran or the Houthis retaliate, but “the weekend’s events have not impacted physical oil supply” in themselves, S&P Global Commodity Insights analysts said.
Yemen’s oil sector has been hit hard by a civil war and insufficient investment. Its crude output has fallen from 300,000-400,000 b/d in 2011 to around 10,000 b/d. This is all refined locally. Yemen receives refined products from the UAE, Saudi Arabia, Russia and India and its key crude oil pipeline runs to the Ras Isa terminal.
S&P Global Commodities at Sea data suggests imports of refined products have reached 3.3 million barrels at Hodeidah and Ras Isa this year. Cargo and ship tracking has been difficult as vessel operators often turn off their automatic identification system in the region for safety or legal reasons, according to industry participants.