ABNA24 - While these days the US and Israeli regime are seeking to put strains on Iran through massive attacks on its infrastructure to bring Tehran to the negotiating table for wresting concessions from it, the continuation of the aggression poses a serious threat to the Arab ally of Washington.
Meanwhile, Saudi Arabia, which as the biggest oil producer in the Persian Gulf needs to export oil and other energy types to live on, is predicted to sustain irreparable harm.
Currently, 90 percent of the kingdom's trade is through the sea and the country needs these routes to operate its ports in the Persian Gulf and the Red Sea.
Since war started on February 28, the Saudi oil exports dropped 50 percent as the Iranian armed forces took control of the Strait of Hormuz. This has caused pain to the petrodollar-reliant kingdom. This comes as only 38 days have gone since the war was waged and closure of the Strait has not yet taken its toll on the economies of countries, and if it drags on, Saudi Arabia will face more serious economic consequences.
Having in mind that there is still no clear outlook for stopping the conflicts in the region and the shadow of threats against all Arab countries remains, the Saudis have devised temporary economic measures to prevent significant losses in their economic sectors.
In this regard, the Saudi Ports Authority announced on Saturday that the 20-day exemption for full export containers and empty imported containers at the King Fahd Industrial Port in Yanbu has been extended. This exemption allows exporters to be exempted from port and storage fees for 20 days, facilitating the export of industrial and petrochemical products more smoothly.
Such measures indicate that the conflict with Iran has significantly impacted economic activities in the Arab kingdom, and if the regional conflicts persist, the negative consequences are expected to increase substantially in the future.
Saudi economy to be choked by closure of Bab-el-Mandeb Strait
With the Strait of Hormuz currently closed and warnings from Iranian political and security officials suggesting that trade conditions would not return to pre-war levels even if hostilities cease, Saudi Arabia has been scrambling to utilize alternative routes for its oil exports in recent weeks.
To reduce its dependence on the Strait of Hormuz, Saudi Arabia has constructed a pipeline from the east to the shores of the Red Sea in recent years, allowing it to conduct a portion of its exports through this route. Since the onset of the Iran conflict, the kingdom has managed to export approximately 4 million barrels of oil per day via the Red Sea pipeline to other countries. However, with Yemen overlooking the strategic Bab-el-Mandeb Strait, one of the world's key trade arteries, the likelihood of this alternative route being blocked remains high. Should Yemeni forces, who have recently engaged in war in favor of Iran, decide to close this critical strait, it would pose an even greater challenge for the Saudis.
If Saudi oil exports grind to a halt due to the closure of the Strait of Hormuz, the situation would be dire if the Bab-el-Mandeb route were also targeted and rendered inoperable, effectively crippling Saudi Arabia's oil export capacity, possibly bringing it close to zero.
Yemen's Ansarullah movement officials have repeatedly warned that if the conflict involving the US and the Israeli regime escalates, they will execute a blockade of Bab-el-Mandeb. This not only poses a threat to the global economy but also places Saudi Arabia and other Persian Gulf monarchies at a greater risk. In essence, the simultaneous closure of both the Strait of Hormuz and Bab-el-Mandeb would suffocate the economic lifeline of the Arab states.
It is worth noting that Saudi Arabia generates approximately $300 billion annually from oil and energy sales. Should this substantial income be disrupted, the country could find itself in a dire situation, leaving many of the ambitious projects that Mohammed bin Salman planned to finish reliant on oil revenues abandoned and incomplete.
The Bab-el-Mandeb Strait, through which around 8.8 million barrels of crude oil and refined products transit daily, would create the biggest energy crisis since the 1973 oil crisis if fully closed or severely disrupted. Thus, Yemen's involvement in the conflict is not merely a tactical factor; it could transform into a decisive strategic leverage in the energy and warfare equation.
Economic threats do not limit themselves to oil and energy exports. (Persian) Gulf Cooperation Council countries, especially Saudi Arabia, are heavily reliant on imports for their agricultural and food needs, with most food imports passing through strategic maritime chokepoints. This is particularly critical for strategic commodities like wheat. If both the Strait of Hormuz and Bab-el-Mandeb remain closed for an extended period, they would face significant challenges in meeting their basic needs.
If maritime routes remain shut down and Saudi oil revenues decline, even if food supplies could be secured via air, there would still not be sufficient funds to cover these costs, presenting a serious challenge for Riyadh.
This situation has led to a limitation of Saudi decision-making options, indicating that both the oil and non-oil economies of Saudi Arabia are intertwined with Iran's will. This context may explain Saudi caution in dealing with Iran, especially considering the fates of the conflicts that will unfold in these straits.
Consequently, Saudi Arabia, which has attempted to weaken Iran's power over the past two decades due to disputes over various regional issues, with assistance from the US and Israeli regime, must consider the repercussions of its warmongering actions. The Saudis should take Iran's warnings seriously: security is either for everyone or for no one.
Thus, if the Saudi rulers want to do mischief and play into the hands of Iran's enemies, they have a price to pay and their "glass economies" will suffer consequences more than others because they seem work towards escalation rather than peace.
/129
Your Comment