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Why Geopolitical Tensions Have Spiked In The Middle East

Picking up from where we left off last time on geopolitical drivers that could send oil prices higher, the Iranian-backed Houthis in Yemen have upped the ante with an attack on the UAE, which had largely withdrawn forces from Yemen, leaving the Saudis high and dry. 

Now, there is a risk they will be pulled back into the melee after the Houthi rebels launched a drone attack on a key oil facility in Abu Dhabi, killing three people and starting a fire at the Emirate’s international airport. The site of the attack was an industrial zone where ADNOC operates its pipeline network and oil tanker storage facility. The industrial zone is adjacent to the international airport. 

It’s not the first time that the Houthis have targeted the UAE, but it is the first time since the UAE largely backed out of Yemen. 

The problem is that the UAE hasn’t entirely withdrawn support for the Yemeni government, even if it has pulled out its own troops. The Houthi message to the UAE has already resulted in an escalation on the part of the Saudis, who led coalition airstrikes on Yemen’s capital, Sana’a on Tuesday–just a day after the Houthi attack on the UAE. 

But this isn’t just about Yemen. It’s about Iraq, too–another area where Iran wants the UAE to stop meddling. The bigger issue, however, is the UAE’s attempt to make peace with Israel and achieve detente with Iran simultaneously. This is where the Saudis have been more … cautious. 

Things…

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