Yemeni Houthis Raise Pressure with Oil Port Attacks as Truce Talks Drag On

Yemen's Houthi group is piling on pressure to extract economic gains in UN-led talks for an extended truce deal with attacks on oil ports in government-held areas, which officials say have disrupted crude exports, choking state revenues. Yemen's foreign ministry said in a statement that the Houthis launched a drone attack on the southern Qena port in Shabwa on Wednesday. The group's military spokesman said on Twitter that the operation "foiled an attempt to loot" Yemen's oil by preventing a vessel from docking. A joint statement by the U.S., British and French ambassadors on Thursday called on the Houthis to immediately cease such attacks, saying "economic warfare will only exacerbate the conflict and humanitarian crisis" in Yemen. Last month, Yemen's Saudi-backed government said its forces intercepted armed drones launched against al-Dhabba oil terminal in Hadhramaut as an oil tanker was preparing to enter.

Rashad Al-Alimi, head of Yemen's Saudi-backed presidential council based in the south, said last week that Houthi attacks on ports in Hadhramaut and Shabwa led to a halt in exports there, saying the group sought to "hamper the council's reform efforts focused on services and livelihoods". The seven-year war between a military coalition led by Saudi Arabia and the Houthis has divided Yemen, with the movement largely holding the north. Houthi military spokesman Yahya Sarea said on Thursday the operations served to safeguard Yemen's oil wealth for its people and "foremost for public sector wages across Yemen". The attacks come as U.N.-led talks continue for an expanded truce deal that includes a mechanism for payment of civil service wages, which the Houthis criticized for not including members of the armed forces. An initial truce expired on Oct. 2.

'PRESSURE TOOL'

"It is clear this is a pressure tool that the Houthis are using to realize additional economic gains in the talks, and not an intention for full military escalation," said Yemen analyst Maysaa Shuja Al-Deen. Levels of violence have sharply dropped since April when the U.N.-brokered truce was agreed and then renewed twice. UN officials say the spirit of truce has held since it expired with only relatively low levels of violence on the main frontlines. It has delivered the longest stretch of relative calm in a conflict that has killed tens of thousands of people. Government sources and oil sector employees told Reuters the incidents raised security concerns at maritime firms, with one last month recalling a tanker due to load 2 million barrels. Canada's Calvalley Petroleum, in a letter dated Oct. 31 to contractors and subcontractors seen by Reuters, said it was forced to halt production as a result of "the current political situation and non-availability of the oil storage capacity".

Employees at PetroMasila told Reuters the Yemeni firm had stopped pumping crude because export tanks were full. Calvalley Petroleum did not immediately respond to an emailed Reuters request for comment. PetroMasila did not immediately respond when contacted. Yemen used to pump some 127,000 barrels per day (bpd) but output collapsed since 2015 when the Saudi-led coalition intervened after the Houthis ousted the government from the capital, Sanaa. Current production was below 80,000 bpd. The internationally recognized government, which relies heavily on oil revenues, was already struggling to pay public wages in an economy ravaged by war and as Yemen grapples with a dire humanitarian crisis that has pushed millions into hunger.