The Middle East’s Arab Gulf oil producers are engaged in a game of cat and mouse with Iran and its re-gional proxies. Ever since Israel and the US launched military strikes against Iran on 28 February, Tehran has sought to squeeze its neighbors’ oil exports to apply economic pressure on the US. As these states have developed new ways to move oil out of the region, Iran has in turn tried to block them.
The entry of Iran’s Houthi allies into the conflict last month with their campaign against Saudi shipping in the southern Red Sea marked a major turning point for regional exports. Until then, Saudi Aramco had been able to keep crude oil exports at around 60% of pre-conflict levels by ramping up exports from Yanbu. Around 80% or 3.3mn b/d of these volumes exited the Red Sea through the Bab al-Mandeb en route to Asia (MEES, 24 July). High oil prices meant this was sufficient to propel Aramco’s profits to a 33% increase last quarter (MEES, 7 August). (CONTINUED - 1112 WORDS)
