Yemen's Economic Crisis: The Impact of Halting Oil Exports
Yemen has been grappling with a severe financial crisis for the past two years, primarily due to the cessation of oil exports, which began in October 2022. This halt arose from ongoing conflicts between the internationally recognized government and the Houthi group, leading to significant economic ramifications. Oil revenues constituted approximately 70% of Yemen's state budget, making the cessation a substantial financial blow to the government.
Financial Losses and Rising Poverty
The Governor of the Central Bank of Yemen, Ahmed Ghaleb Al-Ma'baqi, reported that the country has incurred losses exceeding $6 billion due to the suspension of oil and gas exports, attributed to Houthi attacks on major ports. This situation has exacerbated food insecurity, deteriorated basic services, and increased poverty rates, now exceeding 80%. Economic analyst Wahid Al-Foudai pointed out that the halt has led to a significant decline in the local currency, the riyal, which has plummeted to around 2,050 riyals per dollar, compared to about 1,100 before the oil export stoppage.
Calls for Solutions and International Support
Experts emphasize the urgent need to resume oil exports to stabilize Yemen's economy. Dr. Muhammad Qahtan from Taiz University highlighted that before the war, oil and gas revenues covered a large portion of public spending. He suggested that if the government cannot resume exports, it should adopt austerity measures and improve financial management. Furthermore, journalist Wafiq Saleh stressed the importance of restarting crude oil and liquefied natural gas exports to restore financial stability and protect the riyal from further depreciation. The situation remains critical, with many calling for international support and intervention to alleviate the humanitarian crisis.
