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Why Houthi military gains in Yemen may further increase gas prices

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By

Aya Batrawy

,

Abu Bakr Bashir

A fighter with Yemen's Houthi rebels carries a rocket-propelled grenade launcher as they march during a mobilization campaign in Sanaa, Yemen, Thursday. AP hide caption

DUBAI, United Arab Emirates — A tenuous yearslong truce in Yemen unraveled further this week as Iran-backed Houthi fighters pushed out Saudi-backed Yemeni forces along a key stretch of Red Sea coastline, consolidating their control of a vital shipping route.

Statements by the Houthis and a rival Yemeni commander, who's cited by The Associated Press, said Friday the Iran-backed group had taken control of the port city of Mokha, just north of the Bab el-Mandeb strait, and captured the barren island of Mayun, also known as Perim.

Videos circulating online and broadcast by Arabic news channels show Yemeni army forces and allied militias melting back and leaving their vehicles for the Houthis to seize.

A statement by the Houthis said its fighters had expelled Saudi-backed troops from six districts in the governorates of Taiz and Hodeidah, and freed prisoners along the way.

Senior Houthi leader Mohammed Bukthi told NPR the attacks on Saudi-aligned forces and ships are in response to the kingdom's years-long blockade of Houthi-held areas, which he said had led to deaths from hunger.

"Yemen will not be silenced as Saudi Arabia and its allies are free to navigate these waters while Yemen isn't able to do so in the Red Sea," he said.

Bukthi called it a "blockade for a blockade" and said the aim is to pressure Saudi Arabia to end its airstrikes and military campaign. He said the Houthis are not attacking international shipping through the Red Sea, and focused only on Saudi targets.

The fighting in Yemen, and the Houthis' targeting of Saudi oil carriers around that waterway, coincided this week with another exchange of fire in the Persian Gulf between the United States and Iran.

As a result, the price of Brent crude — a global metric for oil prices — shot up Thursday over $108 a barrel briefly, before settling Friday around $105. The London-based research firm Capital Economics says the fighting on both sides of the Arabian Peninsula raises the risk of even further energy price hikes in the coming weeks.

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AAA says gasoline prices in the United States are up by more than 34% from last year at this time, averaging nearly $4.30 a gallon on Friday. Diesel, used for farming and trucks, is up by more than 63% from a year ago to nearly $6.06 per gallon.

Meanwhile, data from maritime analytics firm Kpler, and cited by multiple news outlets, shows Saudi Arabia exported just 3.2 million barrels a day last month, its lowest level in more than a decade.

Higher oil prices help Gulf Arab producers like Saudi Arabia offset the sharp fall in their energy exports, but they still face growing budget deficits, in part due to Iranian attacks on ships in the Strait of Hormuz, which was Saudi Arabia's main gateway for exports.

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To avoid the Strait of Hormuz, Saudi Arabia had been rerouting its crude through an east-west pipeline leading to the Red Sea near Bab el-Mandeb as a fallback measure to keep oil flowing during the U.S. war on Iran.

An image from Europe's Copernicus Sentinel-3 satellite program, examined by NPR, shows a fire near the western end of the pipeline this week as Houthis targeted the kingdom's energy infrastructure.

An image captured by the European Space Agency's Copernicus Sentinel-3 satellite program shows a fire near the western end of a pipeline used by Saudi Arabia to move oil. ESA/Copernicus Sentinel-3 hide caption

Later Friday, the Saudi Energy Ministry confirmed attacks on the pipeline had occurred on Thursday, forcing a "precautionary suspension."

Iran says Oman will host a meeting on Monday with Gulf Arab countries, as well as Iraq, to discuss a plan that could allow ships to pass through the Strait of Hormuz with Iranian permission. There's also discussion of possible service fees being paid to Oman and Iran — an idea the U.S. rejects.

Saudi Arabia is one of the world's biggest oil producers but its carriers are now being choked off by closures to its tankers in the Bab el-Mandeb and Strait of Hormuz waterways.

Saudi Arabia is also a key stabilizer of energy prices in OPEC, but with its exports curtailed by the two conflicts and other Gulf Arab producers struggling to get oil and gas out, countries around the world are digging into emergency oil reserves to plug the gap, leading to higher prices.

Planet Money The secret meeting that launched OPEC The Houthi attacks on shipping have forced Saudi Arabia to use a much longer and costlier route through the Suez Canal to the Mediterranean Sea and around Africa in order to reach buyers in Asia.

The Houthi takeover of the Yemeni port city of Mokha comes just days after the group fired missiles and drones at four regions of southwestern Saudi Arabia. The group says the attacks were in response to dozens of Saudi airstrikes on Yemen, including one that killed civilians at a prison.

Middle East conflict U.S. says pipelines will make Strait of Hormuz irrelevant. Energy experts disagree The Saudi Energy Ministry said the Houthis struck Saudi oil facilities, sparking fires that halted operations on Tuesday. Saudi Arabia said more than 70 people were wounded in the attacks.

The renewed fighting in Yemen comes 11 years after Saudi Arabia first led a coalition of Arab countries into war in Yemen to roll back a Houthi takeover of the capital, Sanaa, and reinstall Yemen's government to power. More than a decade later, the Houthis still control Sanaa.

The deadly fighting in recent days for control of Mokha and other areas of Yemen's western coast has displaced at least 18,500 people, according to the United Nations' International Organization of Migration. It says families are fleeing with nothing and arriving at humanitarian sites that already lack emergency food stocks and shelter supplies.

Abu Bakr Bashir reported from the U.K., Ahmed Abu Hamda contributed reporting from Cairo and Geoff Brumfiel contributed from Washington, D.C.

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