Oil traders note - Saudi airstrikes in Yemen expose escalating tensions with UAE

Tensions between Saudi Arabia and the UAE have come to the fore after Saudi airstrikes in southern Yemen. This marks the first time Riyadh has directly opposed its former ally in the Yemen conflict. Saudi Arabia has accused UAE-linked channels of supplying weapons to southern separatists. The strikes targeted weapons depots related to the Southern Transitional Council (STC), which is backed by the UAE. This suggests an escalation in political significance as the airstrikes hit Mukalla port in Yemen, an area increasingly significant in regional power dynamics. Saudi-UAE friction has been simmering beneath the surface for years, with both countries diverging sharply over strategic objectives. The UAE has built strong ties with southern militias, while Saudi Arabia has been focused on maintaining territorial integrity and preventing fragmentation of Yemen. This confrontation may have broader implications for energy markets, as both countries are integral to global oil supply chains. Increased tensions in the Gulf region could inflate geopolitical risk premiums, particularly if disputes affect critical maritime routes or logistics. The situation warrants close attention as Yemen emerges once more as a flashpoint in Gulf dynamics.