How Saudi Arabia's looming war with Houthis could spark an oil price surge and affect your gas prices
Saudi Arabia is reportedly gearing up for a major assault on the Iran-backed Houthis, as fears of a widening war in the Middle East heighten.
Saudi Arabia is preparing for a major assault on the Iran-backed Houthis, with a naval invasion and possible ground troops deployment. The Kingdom's military is gearing up for a large-scale operation to break the Houthi stronghold in Yemen. Saudi Arabia's Crown Prince Mohammed bin Salman is reportedly overseeing the operation, which could involve thousands of troops and significant military hardware. The operation is expected to be one of the largest in recent years, with estimates suggesting a budget of over $1 billion.
The looming war with Houthis could spark an oil price surge, affecting gas prices globally. As a result, the average cost of filling a gas tank could increase by up to 10%, with some estimates suggesting a rise of up to $0.25 per gallon. This would be particularly felt by commuters and businesses reliant on fuel, with potential knock-on effects for inflation and economic growth. The price increase could also impact low-income households, who spend a larger proportion of their income on fuel.
The conflict between Saudi Arabia and the Houthis has been escalating for years, with the two sides engaging in a series of proxy battles and skirmishes. The Houthis, backed by Iran, have been launching drone and missile attacks on Saudi oil facilities and cities, prompting a strong response from the Kingdom. Insiders know that the conflict is not just about territorial control, but also about regional influence and the balance of power in the Middle East. The conflict has its roots in the 2011 Arab Spring uprisings, which led to a power vacuum in Yemen and the rise of the Houthi movement.
The Saudi military is expected to launch its operation within the next fortnight, with a key decision on the scope and scale of the invasion due to be made by the end of the month. The operation will be closely watched by global leaders, including the US and European powers, who will be monitoring the situation for potential diplomatic interventions. Interestingly, despite the expected escalation, some analysts believe that the Houthis may actually be seeking a negotiated settlement, having recently appointed a new leader who is seen as more open to talks.
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