Saudi Situation Critical

We are not being told the truth. Saudi Arabia is about to fall. The Houthis have knocked out most of Saudi oil production and refining. As well, they've just shot down a Saudi F-15, using a missile they modified to being surface to air. 

Saudi Arabia's Aramco has notified European customers that deliveries may be suspended from late September. This will cause a fuel crisis as Russian oil has been blocked too, partly as a result of war, but also as a result of sanctions, which I said at the time was an act of self-harm.

The entire world is affected by this development; the US imports critical supplies from Europe, and now these may not arrive, while Saudi oil also heads to the Far East and this will be choked off as well. Can it get any worse? 

Oil production in Africa is ramping up, and Venezuelan flows may return, both of which may reclaim some supply, but globally, the World is in deep trouble right now. What we are looking at, potentially, is a Depression of the late 1920's kind. The problem is, the current leadership in every country is completely hopeless and incompetent beyond belief.

Saudi Arabia May Fall?

Now, the Houthis of Yemen have taken control of the access point to the Red Sea and a vital link to Saudi Arabia has been closed off. The Saudis now only have the Suez Canal, overland to the North, and air for resupply and exports. 

Saudi Arabia may fall. I say this because the Saudi military is pathetic. There is no fight in them, and even now they're running away, simply abandoning valuable US-made military equipment which the Houthis are happy to liberate.

Don't be surprised if you find the Saudi crown prince, MBS, turning up in Switzerland semi-permanently. 

Brief history lesson: Saudi Arabia is essentially an invention of the British. Everyone knows the legend of 'Lawrence of Arabia' - T.E. Lawrence. It is amazing that it has lasted this long, but its days appear numbered.

Regional Conflict

The Houthis of Yemen have announced a blockade of the Bab al-Mandab Strait, principally targeting Saudi Arabia. This will have a major effect on the world economy as currently Saudi Arabia has diverted its oil exports to its ports on the Red Sea, away from transiting the Strait of Hormuz, which is also blocked.  

With this move, we can say that the US-Iran war has now gone regional. Yemen's Houthis are backed by Iran.

Strait of Hormuz

Commentators predicting an oil crisis following Iran's closing of the Strait of Hormuz are well wide of the mark. That is because Saudi Aramco has started shipping more oil out of its Red Sea facilities (see link). Furthermore, Egypt is offering its pipeline to move Saudi oil to the Med.

https://www.hellenicshippingnews.com/egypt-offers-sumed-pipeline-to-facilitate-saudi-oil-exports-amid-hormuz-closure/

I've also seen predictions that some of the people in the Gulf states will starve. But anyone looking at a map will see that there is a land corridor to these states, and so food can get in to feed stranded tourists. The same land corridor could be used to evacuate people from Dubai, Doha and the like. Buses are starting to look mighty useful.

However, there are some serious issues regarding the viability of the United Arab Emirates long term. Dubai as an airport hub could be lost. Ethiopia has been promoting Addis Ababa as a useful mid-point stopover, and they've commenced building a new international airport there. 

Dubai's status as a tax haven sanctuary may be over, too. The rich don't like adding bombs to the risk assessment. It'll also be interesting to see how the large sovereign wealth funds based in the Persian Gulf fare now that their economies are toast. This will massively impact the United Kingdom. Interesting times ahead indeed.

Iran appears to have lost its navy and air force, and this war will end when it runs out of ordnance. I give it another three weeks at this rate. Will China and Russia come to their aid? I doubt it, as Russia has its own issues, plus it'll be selling more oil right now. China tends to be all talk; they've never won a war, and if they enter the fray, they too will lose their entire navy.

South Korea, Japan, South-East Asia and Oceania may experience the rapid onset of an energy crisis, and in Australia and New Zealand, there seems to be little urgency. The latter two really do have useless leaders.