Yemen Oil Exports Resume Amid Security Concerns
The resumption of oil exports from Yemen has raised hopes for the country's economic recovery. The decision, announced by Rashad al-Alimi, head of Yemen's Presidential Leadership Council, aims to revive the government's most important source of foreign currency.
However, restoring oil exports will require more than just a political decision. It needs a secure environment to protect facilities, pipelines, and ports, as well as the confidence of shipping and insurance companies, and international buyers.
Yemen has proven oil reserves estimated at about three billion barrels, primarily concentrated in the Masila, Marib, and Shabwa basins. The country's oil production reached a historical peak of 439,000 barrels per day (bpd) at the beginning of the millennium but declined due to the depletion of some old fields.
According to the International Monetary Fund (IMF), Yemen's oil production settled at 19,000 bpd in 2024. A report by S&P Global estimated actual production at about 7,000-10,000 bpd in 2023 and 2024, almost all of which was for domestic use.
Yemeni Minister of Oil and Minerals Mohammed Bamqaa said that export revenues would be deposited in the Central Bank as part of a government directive to bolster the state's financial resources. He added that total production will initially reach about 60,000 bpd.
However, experts warn that bigger obstacles await after the oil reaches Yemen's ports. Houthi attacks targeting export ports in Hadramout and Shabwa made shipping and insurance companies more wary of handling Yemeni crude, pushing up insurance costs and weakening buyers' willingness to enter into contracts.