Oil sector damage will slow Yemen's recovery

Abstract

Subject Impact of conflict on Yemen's oil and gas sector. Significance Yemen's oil sector has been in serious decline for years due to sabotage, field depletion and underinvestment, although it has remained the mainstay of government finances. Oil and gas fields and facilities are key assets in contention in the current conflict, even though it has halted most production and scared away many foreign operators. Yemen has around 3 billion barrels of oil reserves and 17 trillion cubic feet of gas. Oil revenues are critical to helping address the poverty that underlies much of the country's instability. Impacts Yemen supplies 3% of global LNG, and the loss of this may boost spot prices. Reduced oil revenue will make post-war Yemen even more dependent on aid. Jihadists could capture oil fields and finance themselves through local sales.