In light of the escalation of the oil derivatives’ crisis in Yemen, smuggling of petroleum products from Saudi Arabia to Yemen has increased. A Saudi newspaper revealed that an escalating monitoring movement has been organized to monitor the smuggling of petroleum products by the Saudis to Yemeni territory because of the price difference. A Saudi economic newspaper said that border guards foiled large amounts of derivatives on their way to Yemen.
Data shows a decline in Yemeni oil exports income by more than 64% to 73.4 million dollars in May due to the attacks on the export pipeline while foreign assets reserves narrowed in the Central Bank to its lowest level since the end of 2011. Yemen relies on crude oil exports to finance up to 70% of the state budget.
The Central Bank’s monthly report showed that the export crude amounted to only $671 million on Sana’a in the period from January to May, down to nearly 40% in the same period last year. As a result, the decline in foreign assets reserves of the Central Bank for the sixth month reached 4.6 billion dollars in May from 4.7 billion dollars in April due to the state’s failure to protect the oil pipeline bombings. Foreign financial assistance became a lifeline to Yemen, despite the slow arriving of it. The government hopes to the agreement of this year on a loan of 550 million dollars after long discussions with the IMF this year, which may allow access to additional support from donors.
A number of furnace owners demanded the government to provide diesel and said in a meeting held in Sana’a that the furnaces are about to stop, urging the president and the government to provide diesel quickly. “If the oil company did not provide diesel, tens of bakery ovens in Sana’a will completely stop during the next two days.”
According to Major General Mohammed Al-Ghamdi, official spokesman for the Border Guard of Saudi Arabia, the patrol teams permanently set the smuggling operations by the citizens, noting that fuel and food smugglers are taking advantage of the price difference with some of the neighboring countries to achieve financial returns. Gen. Al-Ghamdi confirmed that the leadership of border guards deal with every citizen, whether a fuel smuggler or infiltrators in accordance with the security measures.