China is providing an economic lifeline to Yemen’s embattled government as it offers a steady outlet for crude exports. Exports to China from the south-eastern Ash Shihr terminal have averaged 29,000 b/d since their resumption in August 2016 following government military advances. Thailand is the only other key buyer with around 10,000 b/d, though Italy took two cargoes totalling 1.6mn barrels late last year (see chart). Some small volumes are also shipped west to Yemen’s Aden refinery to partially supply domestic needs.
The Saudi and UAE-backed Yemeni Government is attempting to rebuild its economy during a civil war that has created a security vacuum partially filled by Al-Qa’ida in the Arabian Peninsula (AQAP), a widespread cholera epidemic and mass civilian casualties and infrastructure destruction. The pre-war economy was dependent on oil and gas revenues and, although minor in scale, renewed crude exports are providing an essential influx of revenue and liquidity to the embattled regime. (CONTINUED - 1019 WORDS)
