Yemen siege impacts Saudi Arabia
The Yemeni blockade on Saudi Arabia has placed a significant burden on the Saudi economy, leading to a reduction in ship traffic through maritime routes, increased export costs, and the imposition of more expensive and slower alternatives, such as using pipelines instead of direct maritime routes. Oil tanker traffic to Yemen has decreased by as much as 56%, and it has become difficult to accurately determine the volume of exported oil, which raises costs and negatively impacts Saudi oil flows—especially as export flexibility diminishes and risks increase for relevant companies and sectors. Additionally, the insurance coverage for Saudi ships in the Red Sea has been severely affected due to complete exclusions by insurance companies, coupled with sharp declines in cargo handling and export operations. These developments threaten the stability of the Kingdom’s oil supplies and financial inflows.
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