Operation Decisive Storm Infography

Yemen, producing less oil than Denmark, shakes global oil markets.

http://business.financialpost.com/news/energy/why-yemen-that-produces-less-oil-than-denmark-is-roiling-energy-markets-this-morning/?__lsa=0110-f0bf

Implications of Yemen turmoil for oil markets

 

Yemen´s recent descent into chaos and into the brink of civil war within the broader context of sectarian strife and clash for leadership of Islam between Saudi Arabia and Iran, where the Houthis are struggling to take control of the country backed and financed allegedly by Tehran, recently had a slight impact on world oil prices just immediately but not so much to think of Yemen as pivot and geostrategic oil country, because it is not a relevant producer. According to latest figures by the EIA, its total production is around 100.000 barrels per day, and reserves totaling 3 billion of barrels, so within the OPEC and Gulf oil and gas heavyweights, this is less than 1% of total production. On the contrary, the relevance of Yemen to world oil prices and market future behaviour is related to what could happen to Saudi Arabia´s shiite minority in the iconic Eastern Province, holding important oil and gas facilities and industrial complex, who can feel inspired by Houthis further potential advance in Yemen, despite Saudi decission to bomb the country along with Arab League forces and also the United States. If some sort of massive unrest and turmoil backlash for Saudi Kingdom authorities on its own soil, now this can demonstrate the real meaning of whats happening now in Yemen. And this without discarding potential sabotaging actions of members of the Al qaeda of the Arabian Peninsula against oil and gas facilities in Yemen and Saudi Arabia, having also in mind their deep rooted grievances against the gulf conservative western oriented petromonarchies, adding to an already explosive meltingpot in which has turned the general situation in the MENA region, with 4 hotspots in Syria, Libya, Iraq and now in Yemen.

And from the geostrategic point of view, Yemen also borders with the Baab al Mandab Strait, a chokepoint where on a daily basis transit about 3.000.000 barrels a day, which runs the risk at the same time of being sabotaged by some rebel factions of Houthis or AQAP, even if not concrete threats exist, but it could happen as to exert pressure to Saudi and current Yemeni government, which could also count with Iranian blessing, resembling this potential scenario to that of former threats to a closure of the Strait of Hormuz. After all, oil and gas pipelines sabotaging and attacks are not unknown in Yemen, where its main oil pipeline, the Marib, has suffered from recurrent attacks coming from rebel actions, although this has not caused a major impact to the world oil market, but in terms of energy security, it absolutely matters. Also for foreign powers, yemeni turmoil serves as some sort of "neo cold war" from where Russia for example, can extract some strategic gains if the Houthis advance further in the country, aggravating threats to the saudi kingdom, a staunch oil and gas rival to Russia, which can maybe think of a possibility of backing the Houthis and Iran in this regard. 

So, the current situation in Yemen, per se it wont have a massive impact to the world oil landscape, but it just gets to influence potential unrest and political instability in Saudi Arabia, connecting also to the Bahrein factor (remember Pearl Square protests by shiites against the Sultan of the country, ally of Saudi Kingdom), then the "shiite arc of instability" this time can set on fire the MENA, and on the very borders of saudi soil, the N°1 oil producer and exporter in the world.

About Le Front National gaining momentum in France and xenophobia growing in Europe

 Le Front National did win a significant second place in last days regional elections in France, led by Marine Le Pen, trailing behind the UMP of Nicolas Sarkozy, which this time took the victory, but representing this a waking call just in the aftermath of Charlie Hebdo´s terror attacks carried out by Muslim immigrants, and in which context this FN second place clearly constitutes a strong warning to french political system and society, which could project growing sentiments and feeling of xenophobia and religious intolerance, and what could in the end be some kind of a beginning of the end of the Agreement of Schengen free movement in the european countries, the reinforcment of nationalism and maybe chauvinistic movements and organizations, in a landscape where already the economic panorama is grim and the euro doesnt show any signal of recovery, in a wider scenario of fragmentation of Europe´s position vis a vis Russia, in terms of energy security, markets, and geopolitics. This second place of Le Front National also is reminiscent of what just happened in Spain and the terror attacks at Madrid´s Atocha train station which just afterwards turned the electorate against the Socialist Party and giving the support to current government of Popular Party´s Mariano Rajoy, as a show of punishment for being weak against immigration and ever growing sentiments of xenophobia. Also, we must wonder and analyze what could mean for Russia the spread and revival of the far right and ultra right wing movements, euroskeptics, parties and organizations, since all these players play in favor of the dissapearance of Europe as a political body, which could bode and fit well into Russia´s desires and intentions in Eurasia as a whole, and interesting to see what the reactions of the White House to all the political dynamics in Europe will be now.