The Kingdom That Cannot Sell Its Oil: How Yemen and Iran Have Trapped Saudi Arabia

Riyadh’s export lifelines are severed, its allies are wavering, and its American patron has no spare capacity to save it

Editorial Analysis | September 2026

The suspension of all crude oil loadings from the Red Sea port of Yanbu represents the most severe disruption to Saudi Arabia’s oil export capacity since the kingdom began exporting petroleum in the 1930s [1][3]. Maritime intelligence firm Vortexa reported that no oil cargo had departed from Yanbu since 11 September 2026, and the kingdom currently holds only twenty-two million barrels of crude stored at the port, enough for four to five days of export at maximum capacity [1][3]. Saudi Aramco has notified European term customers that they will receive no crude oil in October, with at least two refiners receiving a zero allocation, and the pipeline damage has forced the kingdom to cancel some late-September cargoes [2]. The East-West pipeline, which stretches twelve hundred kilometres from Abqaiq in the Eastern Province to Yanbu on the Red Sea coast, had been operating at its maximum capacity of seven million barrels per day to support exports through the western coast [10]. The pipeline’s shutdown means that Saudi Arabia can no longer bypass the Strait of Hormuz, which Iran has effectively closed to shipping traffic, and the kingdom’s ability to export crude to global markets has been severed through both its maritime routes [6][10].

The attack on the East-West pipeline was carried out using drones launched from Iraqi territory, according to the Saudi Foreign Ministry, and the shutdown was described by the Energy Ministry as a precautionary measure while emergency and technical teams checked the pipeline’s safety [10]. Two regional officials told the Associated Press that repairs could take three to five weeks, and Kpler, a maritime data firm, estimated that a month-long shutdown could result in the loss of one hundred and twenty million barrels of exports [6]. Yemeni forces had previously attacked sections of the pipeline in the Riyadh and Medina regions, and the kingdom’s Energy Ministry acknowledged that the pipeline had been targeted by several drones before the decision was taken to halt operations [10]. The attack was part of a broader campaign by Yemen’s Ansarallah movement against Saudi oil infrastructure, which began after the Sana’a government announced a maritime blockade against Saudi Arabia in response to what it described as an unjust siege on Yemen that has lasted for nearly twelve years [8].

The material consequences of this campaign are now fully visible in the kingdom’s export data. Yemen’s Houthi movement has attacked at least eight Saudi oil tankers since the start of the blockade on 22 July 2026, including the tanker Wafa in the northern Red Sea off the coast of Yanbu, and the group has declared that it will escalate attacks in the northern Red Sea because Saudi Arabia is diverting its oil tankers there from the south [8]. Saudi seaborne crude exports via the Bab el-Mandeb Strait had surged eightfold between March and mid-July 2026 compared with the same period in 2025, reaching nearly one hundred million barrels in June, but the Houthi blockade has closed this route to Saudi vessels [8]. The kingdom has rerouted about sixty million barrels of crude from its Gulf ports as disruptions at Yanbu reshape export flows, and European customers face the loss of their regular Saudi supplies next month [1]. The combined effect of the Hormuz closure and the Bab el-Mandeb blockade is that Saudi Arabia cannot export oil through either of its maritime routes, and the East-West pipeline that would have allowed it to bypass the Gulf has been shut down [6][10].

The Strait of Hormuz, through which about twenty per cent of the world’s crude oil and refined products moved before the war, remains effectively closed by Iran, and Tehran has made clear that it will keep the waterway shut until its conditions are met [16]. Iranian parliament speaker Mohammad Bagher Ghalibaf stated that the old American order in West Asia had collapsed and that the Strait of Hormuz would stay closed until Iranian rights were recognised and the United States honoured its commitments [16]. Iran’s Supreme National Security Council Secretary Mohsen Rezaei conveyed seven conditions for ending the war to the United States through Qatar, including an end to the war on all fronts, the release of frozen Iranian assets, and the lifting of the naval blockade [16]. Rezaei also stated that Iran and Oman had finalised a framework for managing shipping through the Strait of Hormuz, with vessels entering the strait using a route close to Iran and those leaving using a route close to Oman, but Iranian officials emphasised that this understanding did not mean the strait had been fully reopened [17]. The closure of Hormuz has removed from the market the bulk of crude exports from Saudi Arabia, the United Arab Emirates, Kuwait, Iraq, and Iran, and the combined loss of these flows has produced the largest disruption to global energy supplies in the history of the oil market [9].

The United States Strategic Petroleum Reserve, which was created after the Arab oil embargo of the early 1970s to provide a cushion against supply disruptions, has been drained to its lowest level since 1982 and now holds only 289.7 million barrels [5]. If President Trump releases the final batch of thirty-nine million barrels from a March agreement with the International Energy Agency, the reserve will fall to about 243 million barrels, and US law bars routine drawdowns below 252.4 million barrels [5]. The reserve has been drained by the Biden and Trump administrations over the past five years, and the Iran war has accelerated the depletion because the United States committed 172 million barrels as part of a record 400-million-barrel coordinated release by IEA members in March 2026 [5]. The SPR’s minimum operating level is 70 million barrels from a purely physical standpoint, but Siddharth Misra, a petroleum engineering professor at Texas A&M University, stated that the actual minimum inventory level for safe operation is close to 250 million barrels because the salt caverns that store the oil can be damaged if the water level rises too high as crude is withdrawn [5]. The reserve’s depletion means that Washington has almost no capacity to cushion global markets from further supply disruptions or to support its allies during the current crisis [5].

China has responded to the energy crisis by cutting its crude oil imports dramatically, reducing them by thirty-two per cent in the second quarter of 2026 compared with the previous quarter, with imports falling below eight million barrels per day in May and June for the first time since 2016 [13]. China’s imports in June were 7.12 million barrels per day, a near-decade low, and even with a partial recovery to 8.41 million barrels per day in July, arrivals were still 24.3 per cent below the level of July 2025 [14]. The United States Energy Information Administration reported that China’s refineries processed 2.2 million barrels per day less crude in the second quarter than in the first, compared with a 3.9 million barrel per day drop in imports, indicating that China was drawing down its vast crude stockpile rather than purchasing from the market [13]. China’s strategic oil stockpile is estimated by analysts to be at least 1.2 billion barrels, and the kingdom’s ability to sustain lower imports for an extended period has reduced global demand and softened the upward price effects of the supply disruption, thereby insulating Beijing from the crisis while Western economies bear the costs [14]. The Reuters analysis noted that China is singlehandedly doing the heavy lifting of cutting crude oil demand in Asia to compensate for reduced shipments from the Middle East, and the loss of imports by Asia is about equal to the drop in imports by China for the past two months [14].

The Mecca Joint Defense Agreement, which Saudi Arabia, Turkey, and Pakistan signed on 7 August 2026, has failed to provide the kingdom with the security guarantee that Riyadh sought when it formalised the alliance [4]. The agreement stipulates that an attack against any one of the parties will be considered an attack against all parties, and it allows the participation of all actors that respect international law and share a vision of peaceful cooperation [4]. Turkish Foreign Minister Hakan Fidan stated that the alliance is at a good stage and represents a strong will, adding that once institutionalisation is complete, talks could be held on bringing new members into the alliance [4]. Pakistan’s Defence Minister Khawaja Asif warned that Houthi attacks on Saudi territory would trigger the Mecca defence agreement, and Prime Minister Shehbaz Sharif condemned the attacks as cowardly [18]. But Pakistan has also played down its role in the Yemen war, saying there was currently no discussion about military action despite the intensifying conflict, and insiders in Islamabad have suggested that any deployments are only for show because Pakistan cannot afford to be dragged into a war against Ansarallah [18]. The gap between the alliance’s formal commitments and the actual willingness of its members to intervene on Saudi Arabia’s behalf has left Riyadh without the military support it needs to defend its oil infrastructure or break the blockade [18].

The United Arab Emirates, which was supposed to be Saudi Arabia’s closest partner in the Gulf, has withdrawn from OPEC effective 1 May 2026, removing the group’s third-largest producer and further weakening the cartel’s influence over global oil supplies and prices [19]. The UAE described its decision as a sovereign, strategic choice grounded in its long-term economic vision, and the withdrawal gives the country greater flexibility in using its energy capacity and strengthens its national development [19]. Analysts estimated that with the UAE leaving, OPEC loses about fifteen per cent of its capacity, and the departure follows similar exits by Qatar, Angola, and Ecuador in recent years, signalling continued loosening of the group’s internal cohesion [19]. The UAE has also accelerated plans to raise crude export capacity from Fujairah, the only Emirati oil export terminal that bypasses the Strait of Hormuz, to as much as four million barrels per day by 2027, and Abu Dhabi is building a new West-East pipeline that will double its export capacity through Fujairah [15]. The UAE’s decision to prioritise its own export capacity over collective Gulf action reflects a broader fragmentation of the Saudi-led coalition, and the kingdom now faces the crisis with fewer reliable allies than at any point in the past decade [19].

The internal contradictions of the Saudi state have become increasingly visible as the external pressures have mounted. Alastair Crooke, a former British diplomat and MI6 officer, has argued that the most important negotiations in the Gulf are not happening between Washington and Tehran, but rather in a quieter campaign involving Saudi tribal power brokers [21]. Crooke contends that under one family rule there exists a volcano of dissent, and if Riyadh compromises with Ansarallah, this might provide impetus for overthrowing the existing power structure and replacing it with a more gentle form of Islam [21]. The Saudi state was constructed around an ultra-sectarian Wahhabi nucleus, and the ruling family monopolised wealth and power much to the consternation of the twenty-two other tribes in the country, many of which have substantial populations and their own historical grievances [21]. Yemen’s Ansarallah movement has seized three Yemeni provinces that Saudi Arabia took in 1934, and one of the movement’s objectives is to end Saudi colonisation and realise national sovereignty, a goal that resonates with tribal leaders who have been excluded from the kingdom’s wealth and power [21]. The material basis of Saudi rule, which depends on the distribution of oil revenues to co-opt tribal leaders and buy social peace, is being eroded by the collapse of the kingdom’s export capacity, and the repression that substitutes for legitimacy becomes more costly as the revenues decline [21].

The materialist and class analysis of this crisis must begin by identifying the specific human agents who benefit from the current configuration of power and those who bear its costs. The House of Saud and its associated elite networks control the state apparatus, the national oil company Aramco, and the sovereign wealth fund, and they have enriched themselves through the Vision 2030 programme, the arms deals, and the consulting contracts that have flowed through the kingdom [11]. The military expenditure of approximately eighty-three billion dollars per year enriches defence contractors in the United States and Europe while producing a military that cannot defeat the Houthis or protect the kingdom’s oil infrastructure [11]. The working class and the poor of Saudi Arabia, along with the populations of Yemen and other countries subjected to Saudi military intervention, bear the costs through austerity, repression, and violence, while the benefits accrue to the ruling family and its foreign patrons [21]. The double-entry framework articulated by analysts of technofeudalism is instructive here: when the news reports that the Iran war has cost Saudi Arabia billions in lost oil revenue, the same transaction represents billions in profits for the defence contractors and consultants who have extracted resources from the kingdom, and the debt that Saudi Arabia is accumulating to finance its war represents assets held by the foreign banks and governments that will collect the interest [11].

The crisis has also exposed the limits of American power in the Gulf, as the United States has been unable to prevent the closure of the Strait of Hormuz, the shutdown of the East-West pipeline, or the Houthi blockade of Saudi shipping despite its substantial military presence in the region. The ISPI analysis noted that Trump’s refusal of Saudi Arabia’s request for help is a decisive blow to American role and credibility in the Gulf, and the United States is now abandoning the kingdom that was supposed to be, along with Israel, the pivot of its regional strategy [11]. The SPR depletion means that Washington cannot cushion the economic consequences of the crisis for its allies, and the production disparities between American and Russian missile systems mean that the United States cannot sustain a prolonged military campaign even if it chose to intervene directly [5]. The American empire is proceeding from disaster to disaster, and the forces that will ultimately dismantle it are already in motion, but the transition will impose costs on the populations of the region that have been subjected to decades of imperial intervention [21].

The final assessment must remain analytical rather than definitive, because multiple plausible outcomes remain possible. Saudi Arabia could accept Yemen’s terms and negotiate an end to the blockade, accepting that its regional influence will be reduced but that its internal stability will be strengthened [21]. The kingdom could attempt to escalate further, accepting higher costs and greater risks without any guarantee of success, but the historical record suggests that any such offensive will collapse once it encounters determined resistance in the mountains [21]. The House of Saud could face a crisis of legitimacy that it cannot suppress, as the tribal networks that have been excluded from power see an opportunity to renegotiate their relationship with the ruling family, and the outcome of this process could be the end of the kingdom as it has existed since 1932 [21]. Or the crisis could produce a negotiated settlement that preserves the Saudi state in a diminished form, with the kingdom accepting a reduced role in regional affairs and a new relationship with Iran and Yemen that reflects the changed balance of power [21]. The indicators that would confirm or undermine each scenario are observable: the pace of repairs to the East-West pipeline, the willingness of Saudi Arabia to negotiate with Ansarallah, the level of tribal dissent within the kingdom, the decisions of foreign investors regarding Saudi assets, and the trajectory of oil prices as the global economy adjusts to the loss of Saudi exports. What is clear from the evidence assembled here is that the current strategy is failing by its own metrics, that the costs are being borne by those who had no part in creating them, and that the only rational course for the House of Saud is to put the kingdom’s own house in order before it is too late.

Authored By: Global GeoPolitics

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References

[1] Hellenic Shipping News (2026) ‘Saudi Red Sea oil shipments halted amid pipeline damage, war on Yemen’, Hellenic Shipping News, 17 September. Available at: https://www.hellenicshippingnews.com/saudi-red-sea-oil-shipments-halted-amid-pipeline-damage-war-on-yemen/ (Accessed: 22 September 2026).

[2] Tank Terminals (2026) ‘Saudi Arabia cuts Europe off from October crude as Gulf exports surge’, Tank Terminals, 21 September. Available at:

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