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About Commodity Insights
14 Feb 2024 | 22:18 UTC
Highlights
US could back Yemeni, Saudi Arabian efforts
Some experts urge nuanced, right-sized strategy
The US could make progress in deterring the Houthi force attacks on ships in the Red Sea by supporting local and regional efforts to retake Houthi territory, experts told members of the US House of Representatives Feb. 14.
"The only times that we have seen the Houthis willing to negotiate and to make compromises let alone concessions have been when their control of territory has been threatened," Kenneth Pollack, senior fellow at the American Enterprise Institute, told the House Foreign Affairs Subcommittee on the Middle East, North Africa and Central Asia.
That does not mean there should be American boots on the ground in Yemen, Pollack said. But it will ultimately require the US to arm, equip and train the anti-Houthi coalition operating under the umbrella of the government of Yemen, and it could require employing American air power as well, he said.
The Houthi attacks on ships in the Red Sea are impacting oil pricing. Delays for Middle East cargoes arriving in Europe due to shippers avoiding Red Sea transits have widened premiums for Brent crude.
Forward pricing structure of Brent over Dubai Exchange of Futures for Swaps shows a pronounced premium for the North Sea grade in April and although that premium then decreases in May, it looks set to grow again over the summer.
Platts, part of S&P Global Commodity Insights, assessed the April swap for Brent over Dubai EFS at $1.60/b on Feb. 13, before falling back to $1.53/b in May and then growing steadily until $1.59/b for August.
The US should reinvigorate efforts by a Saudi Arabia-led coalition to neutralize the Houthi forces, said Simone Ledeen, a senior fellow at the Strauss Center for International Security and Law. The US should provide advanced weaponry, intelligence assistance, logistical support, and training to Saudi forces, she said. This should also include working with the northern tribes in Yemen, she said.
The US should also vigorously enforce sanctions to reduce funds for Iranian terrorism, Ledeen said. And the US should reestablish deterrence with decisive military action against Houthi forces and their Islamic Revolutionary Guard Corps sponsors beyond the current US defense-only strategy, she said.
"By disrupting their operational networks, and reducing Houthis territorial control in Yemen, along with deploying additional US military assets for rapid regional response, the US will be in a much stronger position to restore global commerce routes through the Red Sea and Bab al-Mandeb," Ledeen said.
But the third witness argued for a more nuanced approach. Iran regime insiders run the smuggling networks that circumvent US sanctions and they actually profit from sanctions, said Jon Alterman, the director of the Middle East program at the Center for Strategic and International Studies. Decisive US military action could backfire by increasing regional hostility to the US presence in the region, he said.
"We have to persuade the Iranians that the Houthis aren't worth it, and I worry that instead we are persuading the Iranians the Houthis are totally worth it because we are getting wrapped around the axle and talking about a whole regional program," Alterman said.
"I think we have to right-size the nature of the Houthi threat," Alterman said. "I think degrading their military capabilities is the right thing. But getting into a war of wills over the Houthis I worry is going to leave them victorious and looking strong and us looking weak," he said.