Rising Crude Oil and Food Prices Compound World’s Worst Humanitarian Crisis
The truce announced in Yemen under the auspices of the United Nations in early April was supposed to constitute a relative breakthrough in the fuel crisis.
The country has been suffering for years due to the embargo imposed by the Saudi coalition, under American auspices, on imports, but the timing of the truce was late, because the repercussions of the war in Ukraine on the crude oil market had already cut off the road for Yemenis, to truly benefit from the return of fuel flow (in part) through the port of Hodeida also, the rise in global food prices represented a heavy additional burden that made the announced truce insufficient to alleviate the suffering.
The jump in crude oil prices due to the war in Ukraine reached more than 130 dollars a barrel; this is the highest level in 14 years. According to estimates by the International Monetary Fund, even if prices stabilize at less than 110 dollars, the difference will remain around $40 relative to last year’s prices.
This leap caused a global fuel crisis that engulfed major countries that are not experiencing the worst humanitarian crisis of the era, such as Yemen. Therefore, the impact doubled on the Yemeni people, who could not benefit from the historical drop in oil prices, during the Corona crisis due to the blockade. He had no better opportunity to take advantage of allowing 18 fuel ships to enter the port of Hodeida, after a complete break.
Perhaps the truce ended the long queues that extended for kilometers in front of the stations for supplying oil derivatives in Sana’a and the areas under the control of the Supreme Political Council. But it certainly did not end the crisis, the rise in oil prices and sea freight worldwide, keep it difficult to get fuel in terms of costs in a country where 19 million people are food insecure, according to the latest data from the World Food Program.
Early this month, a report issued by FAO and the Food Program warned that “the war in Ukraine has further exacerbated the already steady rise in energy and food prices around the world, this is already affecting economic stability in all regions, and when this warning is applied to Yemen, the degree of danger is multiplied by the abnormal conditions.
However, these exceptional situations differ between the areas of control of the Supreme Political Council authority, and those under the control of the Saudi coalition, the chances of mitigating the crisis in Sana’a and the governorates associated with its government are slim, because the only source of fuel flow is the port of Hodeidah, which is subject to restrictions that were not terminated by the armistice. The ships are subject to detention by the coalition forces, and this entails large financial fines that contribute to the already high prices of oil derivatives at a global level, and the flow mechanism is governed by the release of the ships, which means that the coalition is in great control of the cost and savings.
Despite this, prices in these areas are still in the reasonable range compared to fuel prices in many countries of the world, in light of the ongoing crisis, and also compared to the prices in the areas under the control of the coalition, in Aden and the provinces associated with its authority, oil derivatives are sold at prices that far exceed the cost of purchase. Although there are no restrictions on import, as is the case in Hodeida port.
According to the information, the bulk of oil derivatives that reach Aden and the southern regions are not sold at official stations at the official price, which is higher than the global rise rate, rather, it is distributed to the stations of the so-called “commercial price” who monopolize the quantities at a price higher than the already high official price.
During the last period, these areas witnessed long queues in front of fuel stations. Similar to the queues that were seen in Sana’a during the period when the coalition was preventing ships from reaching the port of Hodeidah, it is a comparison that reveals the existence of a problem greater than the global repercussions and the conditions of the war, because there are no restrictions on the flow of fuel to Aden and the areas under the control of the coalition.
In addition, the pro-coalition government still prefers to export all crude oil abroad (and everyone is wondering about the fate of the revenues), that it be refined in local refineries to help alleviate the oil derivatives crisis and reduce their prices, which has brought the situation to a very bad degree so that the provinces richest in oil wealth are among the provinces most affected by the fuel crisis!
All these different circumstances between Sana’a and Aden make Yemen more affected than any other country by the crisis of high fuel and food prices. Perhaps the best opportunity to mitigate this effect a little is to lift the siege enabling the country to utilize its capabilities in the most appropriate manner instead of wasting them.
David Beasley, Executive Director of the World Food Program stresses: “Conditions are now much worse than during the Arab Spring of 2011, and the food price crisis during 2007-2008, when political turmoil, riots and protests rocked 48 countries.
This warning clearly explains the inability of the armistice in Yemen to face the global effects of the Russian-Ukrainian war (especially since the ceiling of the armistice is very low for the needs of Yemenis), It also makes it necessary to search for broader solutions that can overcome the exceptional circumstances of the country suffering the worst humanitarian crisis in the world.