The developing rift between Saudi Arabia and its coalition partner, the UAE, has come out into the open in recent weeks. The Wall Street Journal reported that Saudi Crown Prince and de facto ruler Mohammed bin Salman told journalists that the UAE had “stabbed them in the back,” and threatened to take direct action against its gulf rival. The deterioration of the relationship could have devastating consequences for Yemen. Competition between the groups backed by the Gulf powers has been a feature of the conflict since 2018: the UAE-backed Southern Transitional Council (STC) has representatives on the governing Presidential Leadership Council (PLC) and controls swathes of southern territory, including the interim capital Aden.
The current locus of this contest is in the expansive eastern governorate of Hadramawt. The STC has attempted to expand its influence in the governorate as part of its project to cement control of the territory of the former South Yemen. The group has sent additional forces to the governorate’s capital, Mukalla city, and agitated against the Islah-affiliated military forces based in Wadi Hadramawt, supported by Saudi Arabia. The Islamist Islah party is a particular target of the UAE due to its ties to the Muslim Brotherhood, which the Emirates views as a regional and domestic threat to its monarchy.
But the STC’s campaign has not gone unchallenged. Islah has sent reinforcements to the governorate, and Saudi Arabia, viewing its long border with Hadramawt as a strategic liability, has become increasingly active in thwarting attempts to bring the governorate under STC control. The Saudis invited numerous Hadrami political and tribal figures to Riyadh for consultations with Governor Mabkhout bin Madi, against the wishes of STC chief and PLC member Aiderous al-Zubaidi, who reportedly tried to persuade them not to go. The result of the meetings was the announcement of a new, Saudi-backed Hadramawt National Council and a host of development projects, along with explicit support for the governorate’s authority to manage its own internal affairs. The announcement was met with predictable opposition from groups affiliated with the STC.
In concert with the initiative, PLC Chief Rashad al-Alimi traveled to Hadramawt for the first time since assuming his position in April 2022. In a June 25 speech to leaders of the local authority in Mukalla city, he promised to provide Hadramis autonomy in the management of financial, administrative, and security matters. In coordination with the visit, the Saudi Development and Reconstruction Program for Yemen pledged US$320 million for 20 development projects, including a cancer hospital, renovation of a university hospital, new roads, and construction of a power station that will link up to the Saudi electricity grid.
Saudi Arabia has pressed on with plans to formalize the arrangement, charging a nine-member council led by former transport minister Badr Basalama to draw up internal regulations within two months, ahead of a general assembly. Both Basalama and Bin Madi received financial support from the Saudis to complete the program, with the former reportedly accepting 30 million Saudi riyals. Basalama has already secured the participation of two key political figures in Hadramawt: Deputy Parliament Speaker Mohsen Basurrah from Islah and Amr bin Habrish from the Hadramawt Inclusive Conference. He will likely also require the participation of Shura Council chairman and former prime minister Ahmed Obaid bin Dagher, and Khaled Bahah, who preceded Bin Dagher as prime minister under President Abdo Rabbu Mansour Hadi. Hadrami political leaders were again called to Riyadh on July 24. Interestingly, the invitees included Faraj al-Bahsani, a PLC member and former Hadramawt governor who was recently made vice president of the STC, along with his PLC colleague Abdelrahman “Abu Zaraa” al-Mahrami, commander of the UAE-backed Giants Brigades, who also recently joined the STC. Their alignment came as a surprise and reportedly angered Saudi Arabia.
Support for Hadrami autonomy has drawn attention from other governorates, and Saudi authorities are trying to bring on board figures from Al-Mahra and Shabwa for similar projects. The campaign can be seen as an attempt to redress knock-on effects from the removal of former president Hadi. The breakdown of his network of allies in southern governorates created a political vacuum, providing an opening for the STC to step in. The UAE now fears that the Hadramawt National Council could become a successful model which could deprive them of the influence they thought they had gained by backing the STC. In response, they have sought to paper over competition between the STC and other groups they support, including Tareq Saleh’s National Resistance forces and the Giants Brigades.
Western governments have expressed annoyance at the STC’s agitation, in particular a threat to withhold revenue from the central bank in Aden, which they see as destabilizing the PLC and undermining its authority. The group has since modified its tone in search of international support. Al-Zubaidi spoke on June 22 at Chatham House in London, saying the PLC was united in confronting the Houthi group (Ansar Allah) and economic challenges, stating the STC would only seek the restoration of an independent southern state through peaceful means. But the visit also seemed designed to convince Western governments that since a de facto Houthi state now exists in the north, a revived southern one would be a natural complement. “The new reality is that the Houthis control the north and the STC governs in the south,” Al-Zubaidi told The Guardian. He had a chance to relay this message to the British government via a meeting with Minister of State for the Middle East, North Africa, South Asia, and the United Nations Tariq Ahmad. Al-Zubaidi also traveled to Riyadh and met US Ambassador to Yemen Stephen Fagin in the UAE before returning to Aden on July 21. His political rivalry with PLC chief Rashad al-Alimi is set to intensify in September when both figures are expected to attend the UN General Assembly in New York.
Political contestation in Hadramawt is unlikely to abate. An STC-organized demonstration on July 7 to mark the end of the 1994 civil war led to clashes in Seyoun when Al-Kathir tribesmen tried to remove flags and slogans placed around the old sultan’s palace. Several people were injured. A statement issued by the tribe claimed the STC had violated an agreement not to politicize the palace, while the STC depicted the incident as an Islah-organized assault on its members led by forces of the 1st Military Region. Islah-affiliated security forces in Seyoun subsequently suppressed STC-affiliated Youth of Rage demonstrations in front of the palace. The incidents are typical of the political agitation that has gripped Hadramawt since last year. The eroding Saudi-UAE relationship, and Saudi Arabia’s expanded role in the governorate, could augur further escalation.
Houthi-Saudi Talks in Holding Pattern
Saudi Arabia’s flurry of activity in Hadramawt comes in sharp contrast to its ongoing negotiations with the Houthis, which have appeared to stall. The primary issues of contention remain: a dispute over how public sector salaries are paid; and Saudi Arabia’s status as a mediator rather than a participant in the conflict. The Houthis have insisted that salaries, including those of its own military and security forces, be paid out of government oil revenues. The demand scuttled efforts to renew a UN-brokered truce last October and has remained a sticking point in talks. The characterization of Saudi participation is perhaps even more intractable. Conceding their status as a belligerent is anathema to the Saudi government, as it would confer its status as the loser of the conflict at a time when they are trying to expand their regional and global influence.
The lack of progress in talks has not yet altered Saudi Arabia’s accommodative stance. A Houthi pilgrim group, reportedly including military commander Yahya Abdullah al-Razami, Muscat-based lead negotiator Mohammed Abdelsalam, veteran politician Saleh Habra, and Mohammed Abdelazim al-Houthi visited Mecca ahead of Eid al-Adha. The trip gives the impression that despite the gridlock in negotiations Saudi-Houthi relations are far from the breaking point. Sources in Saudi Arabia confirmed that leading Houthi figures, including Al-Razami and Abdelsalam – insiders who are close to the group’s leader Abdelmalek al-Houthi – held secret discussions with senior officials in Riyadh, including Defense Minister Khaled bin Salman, over eight days following Eid al-Adha, but the negotiations ended without further progress.
If the Houthi-Saudi talks fail to regain traction, the first major renewal of hostilities could be in Marib (see, Military and Security) Houthi forces continue to amass on Marib’s frontlines – sources suggest there are up to 30,000 fighters, the highest number since the announcement of last year’s truce. As yet, there is no indication of how Saudi Arabia intends to respond if fighting resumes, or whether the coalition would resume aerial bombing, which was previously critical to defending the flat desert plains on the outskirts of Marib city. Marib’s oil and gas fields would provide a much-needed source of income to the Houthis, and the group expended enormous resources attempting to seize the area in between early 2020 and late 2021. The offensive was only halted with the intercession of the UAE-backed Giants Brigades, whose counterattack established the current frontlines.
Saudi Support Arrives After Summer of Discontent
On August 1, Saudi Arabia announced long-awaited financial support for the internationally recognized government, offering a US$1.2 billion grant to finance the public budget and prop up the rial (see, The Economy). Saudi Ambassador to Yemen Mohammed al-Jaber stated that the first batch of new funds would be released for use on August 2, and media sources reported that the tranche will amount to US$250 million. Government officials said the funds would finance the government’s budget, compensating for the collapse of public revenues following Houthi drone attacks on infrastructure at oil ports in Shabwa and Hadramawt last fall, and to pay for vital expenditures, including public sector salaries and fuel for power stations in government-held areas. The support will also help stabilize the rial and underwrite the weekly foreign exchange auctions that finance the import of basic commodities.
The belated support announcement follows a painful summer for the internationally recognized government, which was forced to further suspend public utilities, including electricity provision, due to a lack of funds. As it ran out of foreign currency, the government was also forced to suspend auctions financing the import of basic commodities, including food, and the value of rials in government-held areas plummeted, trading as low as YR1,500 to the dollar. Already hamstrung by the effective Houthi blockade of oil exports and efforts to reroute imports to Hudaydah, government revenues took a further hit when Houthi authorities banned domestically produced cooking gas, switching to imported fuel.
With the government unable to afford fuel for its power plants, rolling blackouts spread across the south as electricity cuts grew ever longer. The use of poor-quality replacement fuel contributed to air pollution. Many local generators shut down entirely, leaving residents without power during the hottest months of the year. The crisis provoked street protests in Aden and other government-controlled areas, and with them political recriminations. On June 12, STC-affiliated Aden governor Ahmed Lamlas directed local authorities to stop sending revenues to the central government to protest what he described as the government’s withholding of electricity to punish residents of the interim capital. The accusation, which gained traction among STC leaders and their allies in other southern governorates, threatened to further shrink the government’s revenue sources. After the prime minister’s office announced the situation was its top priority, Lamlas reversed course and praised the government for addressing his concerns. Nevertheless, the episode drew international condemnation and demonstrated the fragility of the central government’s position.
On July 12, Al-Alimi went to Riyadh for a PLC meeting to discuss the crisis. He reportedly also requested renewed restrictions on the ports of Hudaydah and Sana’a airport to try to force Houthi authorities to give ground in the economic war and ease their effective blockade of government oil exports. The announcement of the new Saudi funding has revived the government’s fortunes in the short term, but without the restoration of its revenue streams, it will remain wholly dependent on such intermittent support.
The burgeoning economic war has not gone unnoticed by the international community. UN Special Envoy for Yemen Hans Grundberg told the UN Security Council on July 11 that the economic battle risked ending the fragile informal truce which has persisted since the formal agreement expired last October. The US, France, and the UK issued a joint statement praising the warring parties for generally adhering to the expired truce but criticized the Houthis for the intensification of the economic conflict. They also called on the movement to refrain from military escalation and engage with the UN-led peace process, warning that new fighting “would lead to their total isolation by the international community.”
It is unclear why the Saudis waited so long to extend support to the fragile government they have set up in Yemen; their hand-sitting exposed the PLC to substantial risk. If full-scale conflict broke out in Marib, or on other frontlines, the government would have had significant difficulty paying its military forces. It is possible that the Saudi government was holding up assistance in acquiescence to the Houthis, who have repeatedly demanded that oil and gas revenues be shared. It may also have been seeking to undermine the popularity of the STC, now a major component of the government and the dominant military actor in most of southern Yemen. Or it may just have been a symptom of systemic dysfunction: Saudi ambassador Al-Jaber spearheads the kingdom’s Yemen policy, but other figures in the foreign ministry and special committee on Yemen reportedly disagree with his strategy for disengagement.
FSO Safer Operation Begins at Last
On July 25, the UN said it had begun the transfer of the 1.14 million barrels of oil stored in the decrepit FSO Safer tanker, which lies moored off the coast of Hudaydah. On July 17, UN officials handed over the replacement ship, renamed the “Yemen,” to Houthi officials, who a week later gave them authority over the vessel and permission to proceed. UN Resident Coordinator in Yemen David Gressly has estimated that the tricky operation will take between two weeks and a month, and it is still some US$20 million short of the US$143 million it will cost to complete.
The transfer will avert the danger of the ship breaking up and spilling massive amounts of oil into the Red Sea, disrupting international shipping and destroying the ecosystem. The floating storage and offloading facility has been moored off Hudaydah since the 1980s and has not been maintained since the war began in 2015. The details of the deal between the UN and Houthi authorities have not been made public, and the internationally recognized government has mainly been kept in the dark during the negotiations.
On August 1, the United Nations announced it had transferred more than half of the crude oil onboard to the replacement ship. Even with the transfer underway, a number of questions remain. It is unclear what will be done with the recovered oil, worth an estimated US$80 million, with both sides likely to make a claim. Houthi media outlets have insisted that Houthi authorities will maintain ownership of the replacement ship, though officials have suggested that the replacement vessel is also old, risking further problems if it is neglected. And the ultimate fate of the Safer –whether it will be scrapped or refurbished, and who would undertake the work–is unclear.
On July 10, the UN Security Council unanimously agreed to renew the mandate of the United Nations Mission to Support the Hudaydah Agreement (UNMHA) for another year. The mission, which has had limited effectiveness, is supposed to ensure a governorate-wide ceasefire and support mine-clearing operations in Hudaydah city. Lauded at the time for securing an entry point for vital humanitarian aid, the Houthis have since retaken the city and its environs and have used the port to exert economic leverage over the government.