Saudi and Houthi fighting intensifies, keeping energy markets under strain

DUBAI: Exchanges of fire between Saudi Arabia and Houthi forces intensified through the week, with both sides striking energy and military targets, adding to the strain on shipping lanes and world oil prices.

The Houthi military spokesman, Yahya Saree, said the group launched drone and missile attacks on the Yanbu oil port on the Red Sea coast and on the Khamis Mushait airbase.

Saudi Arabia, for its part, was reported to have flown about 450 air strikes over Yemen this week.

The wider conflict began on February 28 when the United States and Israel attacked Iran, and is now in its seventh month. The Houthis declared a naval blockade against Saudi Arabia in July.

United States President Donald Trump said on Wednesday night that he hoped the war was nearing its end, and that Iran wanted a deal. He said he had heard as much directly from the Iranian side, without elaborating.

The effect on energy markets is already visible. Damage to the East-West pipeline threatens as much as four per cent of global oil supply. Brent crude stood at about US$108 a barrel on Wednesday before easing to US$104.59 on Thursday, while diesel in the United States hit a record above US$6.30 a gallon.

The Strait of Hormuz, the focus of tension with Iran, normally carries about 20 per cent of the world's oil and liquefied natural gas.

Inside Yemen, the Houthis seized the port city of Mocha and Mayyun Island earlier this month, completing their control of the Bab al-Mandeb strait, a main shipping route.

More than 82,000 people have been driven from their homes since early September, according to reporting in the middle of the month, and the figure has kept climbing since. More than 2,000 Yemenis arrived in Djibouti within a single 24-hour period.

Houthi attacks on the Saudi cities of Abha, Khamis Mushait, Jazan and Najran earlier this month wounded 73 people.

The United States has tightened a travel ban for its government employees within 20 miles of the Yemeni border.

For Malaysia, the conflict is already being felt through energy costs. TNB has linked the AFA surcharge imposed on domestic electricity users from May to higher generation fuel costs stemming from the regional crisis.