Yemen fuel shortages grow, pipeline shut -trade

By Humeyra Pamuk and Jonathan Saul

ISTANBUL/LONDON, June 6 (Reuters) – Fuel shortages in many parts of Yemen worsened as the country’s main oil pipeline remained shut and tight funding hit imports, trade and shipping sources said on Monday. A blast in March on the pipeline, suspected to have been carried out by angry tribesmen, has stopped the flow of light Marib crude, which has forced the 130,000 barrels per day (bpd) Aden refinery to shut and hurt fuel supplies.

“There has been no flow of crude and no Marib output. The fuel shortages are worsening, especially in Sanaa,” a Yemen-based shipping source said.

“Yes they’re importing, but not enough as they don’t have the money for it, and you can’t find a lot of people these days to sell to them, trade with them.”

Trade sources said that repairs and testing of the pipeline would take around two weeks from when the work begins.

“When that will be remains unknown and depends on the willingness of tribes to allow it to happen,” one source said.

Yemenis celebrated on Monday what many hoped will be a new era without President Ali Abdullah Saleh, who is now recuperating in Saudi Arabia after an operation to remove shrapnel from his chest a day earlier.

The future remains uncertain for Yemen, home to an al Qaeda wing aiming to exploit a potential power vacuum in a nation near vital global oil transport links and torn by complex rivalries among tribal leaders, generals and politicians.

Yemen produced a total of around 260,000 bpd of crude oil in 2010. Around 110,000 bpd of that is light crude, which is in short supply globally after Libyan output came to a virtual standstill due to a revolt there.



In recent weeks Yemen has tried to boost fuel imports to make up for the closure of the Aden refinery.

“There are several vessels due — two in the next coming days for diesel to be used in power stations, (and) at least one cargo of gasoline. But the thing is they’re running out of fuel very quickly,” the shipping source said.

A trade source said fuel shortages have meant fuel prices have soared, with a 20-litre container of petrol in bigger cities such as Aden costing 1,500 rials ($7.01) and much higher at around 7,000 rials in more remote areas.

“People are buying fuel where they can and taking it to other areas where supplies are more scarce,” the source said.

While Yemen’s light Marib crude output has been shut since mid-March, heavier Masila crude output and exports have so far been unaffected.

Any descent into chaos in Yemen, the Arab world’s poorest country, which lies next to oil giant Saudi Arabia and major shipping lanes, would alarm Gulf neighbours and Western powers worried about al Qaeda.