Over the past several days, Saudi Arabia has been seen moving substantial military equipment to its border with Yemen.  Yemen has increasingly unraveled into unrest and on the verge of civil war, as Iranian-backed rebels continue to rough up government forces.  Yemeni President Abdu Rabbu Mansour Hadi fled his dwelling earlier this week and has gone into hiding, as rebels storm his presidential palace and other government buildings.  Additionally, American forces operating in Yemen recently pulled out of the country just days ago, as fighting raged throughout the country and gains made by Islamic terrorists grew.  Aside from Syria and Iraq, Yemen is poised to join the group of disgruntled nations that are under attack by radical extremism.  Oil has jumped up on the news.  US WTI crude is up $1.45 to $50.65 and Brent crude is up around $1.40 to $57.90.  US stocks have just recently opened up for the day lower slightly, the Dow Jones is down -$64, S&P 500 is lower -$6.25, and Nasdaq is trading lower -$23.64.

Coalition of 10 nations enters fight in Yemen

While it is not completely clear which nations have entered into Saudi Arabia’s military coalition in Yemen, we do know that around 10 other nations in the region have joined the Saudis in airstrikes against radical extremist locations.  Yemen has long been a weakened country that has allowed factions of Al Qaeda to regroup and conduct operations out of the country.  Now, as Saudi Arabia’s national security is threatened and Yemen could fall in the hands of terrorists, the Arab nation has taken matters into its own hands to help solve the local threat.  It is unclear whether Saudi Arabia will use ground forces, the length of the military operation, etc. Egypt has so far denied its involvement with Saudi Arabia, but speculation says that they most likely are in the coalition, but not entered the fighting yet.

New York Times Yemen
New York Times

Houthi rebels capture Yemeni fighter planes/air base

According to the New York Times, Houthi rebels had captured Al Anad air base on Wednesday.  The air base was once a critical launching point for US military operations in Yemen and for Yemeni Air Force.  However, it was later known that Houthi rebels were able to loot Yemeni Air Force fighter planes and used them to launch strikes on various sites, such as President Hadi’s dwelling and other government targets.  The city of Aden is very close to being lost to the Houthi rebels and would represent a major blow to the country’s stability.  As you can see with the map, most of the fighting and military operations are occurring on the western part of Yemen, but also happens to be a very key part to Yemen’s government and a largely populated region.

While Saudi Arabia’s intervention is only several hours long so far, it will be important to see whether the coalition is able to make strides against rebel terrorists in the country.  The Yemeni government is in dire need of military support right now, and it looks as though it will be up to Saudi Arabia and its allies to help get Yemen back on its feet and saved from the same fate as Syria and Iraq.  Many of the details of Saudi Arabia’s military intervention are still unknown and it is likely that this operation is not going to be done overnight.  This could likely spark a rally in oil, as further unrest in the region will lead to speculation of a potential output disruption, sending prices higher.