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.
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