Saudi Arabia and Mohammed bin Salman, the 41-year-old crown prince of the country, are facing serious challenges due to intensifying geopolitical and economic pressures. The shutdown of a key east-west pipeline and the escalation of conflicts in the region have had significant impacts on the country's development plans, especially in the fields of economy and oil production.
Impact of the War and Attacks by Ansar Allah
The war between the U.S. and Iran has become a critical point for Saudi Arabia. While Saudi Arabia was initially spared from retaliatory attacks, it is now facing intensified assaults from Yemeni Ansar Allah forces on energy lines and western cities of the country. These attacks, especially after the capture of more areas in Yemen including the port of Mocha, have increased Ansar Allah's control over vital waterways. Additionally, drone attacks allegedly carried out by Tehran-affiliated groups in Iraq have led to the complete shutdown of the east-west pipeline.
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Emergency Situation in Cities and Economic Impacts
The situation in western Saudi cities has reached the brink of a new crisis. On Tuesday, officials from Saudi security agencies declared an air alert status for the cities of Jeddah, Mecca, and the historical region of Al-Ula. The shutdown of the east-west pipeline has severely reduced Saudi oil production, and it is expected that this pipeline will be out of service for about six weeks. This issue could lead to a reduction of tens of billions of dollars in Riyadh's export revenues and exacerbate global inflationary pressures.
While Saudi Arabia has foreign reserves and a $1.4 trillion sovereign wealth fund, economic assessments indicate that the country's dollar bonds are among the worst performers in emerging markets. In this context, Tarek Youssef, a senior member of the Middle East Council think tank, has described the current situation as extremely concerning and emphasized the need for fundamental decision-making.
Mohammed bin Salman is seeking military support from allied countries including the U.S. and the U.K. to find a solution to this crisis. However, due to the sensitive political situation in the U.S., the willingness for direct intervention is limited. Additionally, the crown prince has traveled to Egypt and met with Abdel Fattah el-Sisi to discuss maritime security in the Red Sea.
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