Unresolved Houthi Issue: the latest factor that could determine crude oil price

Houthi missiles

While Israel is under serious threat by the rockets fired from Gaza strip by Hamas, Saudi Arabia was not spared by the Houthi rebels even on the most important day in the Islamic calendar, the Eid.

Saudi security forces said on Thursday that they intercepted eight explosive-laden drones and three ballistic missiles at night on Wednesday.

The arsenal is clearly aimed at Saudi infrastructure in general and oil installations in particular. Although the US Patriotic Missile Defence System intercepts – and destroy – most of them, according to the law of probability, a few of them slipping through the ‘net’  is inevitable; what Houthis appear to be doing is increasing the probability of success by increasing the number of projectiles fired from their territory.

This is exactly what Hamas, the Palestinian group that rules Gaza Strip, has been doing in the past few days that put the nation of Israel in an unprecedented war-footing.

Although the Iron-Dome, Israel’s own missile defence system, intercepts majority of the oncoming rockets fired by the Hamas, a few of them still manage to cause considerable damage while escaping the counter measures.

In addition, they really pose a risk to civilian aircrafts: Israel’s main airport near Tel Aviv, for instance, has been forced to shut down to minimize the damage by the rockets.

Of course, the Saudi-led Arab coalition aircrafts will hit back at Houthi targets in Yemen in return – and on impulse. They, however, do not seem to be either strategically coherent or productive in the long run; they often lead to collateral damage, which in turn leave their Western allies in an uneasy lurch; the strained realtionship between the US and the Arab coalition does not help things either - in the hour of need of the latter.

The Houthis, meanwhile, seem to be getting bolder and more competent at what they do, day by day, much to the dismay of Saudi-led Arab coalition.

So far they have fired 626 drones and 369 ballistic missiles at Saudi targets, a staggeringly high number - and the frequency of sending them.

It’s no secret who fund the Houthis and provide them with the know-how and vital resources. In recent weeks, there have been movements to reset strained relationship between Iran and Saudi Arabia; the success remains to be seen, though.

Although both sides expressed the willingness to repair ties, they were realistic not to expect too much from the discussions; both side were just cautiously optimistic.

Unless the relationship between Iran and Saudi Arabia improves dramatically, the threat from Houthi missiles will cast a menacing shadow over the vast Kingdom – and its most crucial asset, the oil fields.

Unless the conflict between the Saudis and Houthi rebels die down, the Houthi aspect will be a decisive factor in determining the crude oil price in the coming months; the world’s top oil exporter has never been in this predicament even during the past Gulf wars and the growing threat to its oil fields – and its inability to keep the threat at bay – can rattle the markets at regular intervals.

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