Escalation in Yemen likely to squeeze Saudi oil suppliespublished at 12:49 BST

12:49 BST

Jonathan Josephs
BBC business reporter

These latest escalations are likely to further squeeze global energy supplies in a week where the price of oil has already surged past $100 a barrel.

It’s the first time that has happened since late July, and that reflects traders concerns that Saudi Arabian oil supplies have fallen sharply.

With the world's second biggest oil producer under renewed attack from the Houthis there could be yet more pressure on those supplies.

Different figures for Saudi oil production have been published by in the last 24 hours but both show a big drop in August compared to July.

The International Energy Agency says it fell from 8.24 million, external barrels per day (bpd) to 5.97 million bpd, whereas Saudi government figures published by the Organization of the Petroleum Exporting Countries (OPEC) suggest the drop was from 8.14 million, external bpd to 6.24 million bpd.

Either way, the reduction is significant and it means production is heavily down on the same time last year.

Meanwhile, supplies via the Strait of Hormuz also remain reduced and President Trump’s suggestion that the US Iran conflict won't be over for some time means there is little prospect of that changing.

These higher energy prices continue to stoke inflation around the world which is putting pressure on central banks to increase interest rates as the European Central Bank did yesterday.

The chances of the US and Japan following suit next week are growing and the fear is that will weigh down economic growth.

Satellite image shows smoke plume on Saudi Red Sea oil pipelinepublished at 12:36 BST

12:36 BST

By Paul Brown

Satellite imagery indicates there were several fires yesterday along a 68 mile (109km) stretch of Saudi Arabia's Abqaiq-Yanbu oil pipeline, which connects the Gulf and Red Sea.

European Space Agency imagery examined by BBC Verify shows a large plume of black smoke emanating from the vicinity of pumping station about 45 miles (72km) south of Medina.

Image source, Sentinel-2, Copernicus

Data from Nasa's fire-detection software FIRMS also show heat anomalies at eight points along the pipeline at around 17:00 BST yesterday.

One of these heat signatures is located at the same pumping station.

Image source, Nasa FIRMS

The pipeline is used by Saudi Arabia as an alternative to exporting via the Strait of Hormuz, which has been severely disrupted since the outbreak of the US-Israel war with Iran in February.

It is not possible to say what the exact cause of the smoke plume was, or how much damage has been caused, from the satellite images.

But experts on social media say, in the event of damage to a pipeline, safety systems are in place to close valves and redirect the pipeline's contents within a damaged section to burn off as flares to reduce further impact.

This could mean the multiple heat signatures are the result of these safety measures triggered by a single point of damage.

Following the effective closure of the Strait of Hormuz for large periods of the US-Iran war, Saudi Arabia turned to its east-west pipeline to transport oil exports to the Red Sea.

Earlier this year Saudi Arabia was diverting as much at 70% of its crude exports from the Gulf to its Red Sea port of Yanbu through the pipeline.

Through this pipeline, the Saudis have been able to ship oil to Asia travelling south through the Red Sea's Bab al-Mandab Strait.

However, with the Houthis reportedly reaching Perim Island, that divides the strait, Saudi oil exports could be impacted.

The Houthis say they pose no threat to international shipping, except for vessels from Saudi Arabia.

Katy Watson
Reporting from Jerusalem

Yemen has been locked in a civil war since 2014 when the Houthi movement, which has links with Iran, took the capital Sanaa.

It’s caused one of the worst humanitarian crises in the world – thousands have died and nearly five million have been displaced, with many facing starvation.

The roots of the conflict started in the Arab Spring of 2011 – an uprising forced the country's long-time authoritarian president, Ali Abdullah Saleh, to hand over power to his deputy, Abdrabbuh Mansour Hadi.

But the political transition was anything but smooth and the Houthis took advantage of Hadi’s weakness and toppled his government

In March 2015, Saudi Arabia led air strikes against the Houthis, intending to restore Hadi to power.

The Saudi-led coalition was worried that if the Houthis' influence would empower their rival regional power Iran, in Yemen.

By 2022, a UN-brokered ceasefire was agreed – but it’s come under huge strain this year with the war in Iran breaking out.

Peace has become fragile once again – the Houthis know they will have leverage over the US if they can control the Red Sea

Houthi military spokesman Yahya Sarea says a statement is expected - but does not provide more details about when.

In a post on Telegram, he says the group will announce "a large-scale, high-impact military operation".

A significant move that raises tensionspublished at 11:19 BST

11:19 BST

Katy Watson
Reporting from Jerusalem

This reported move is significant – and would put the Houthis in control of a key island that divides the Bab al-Mandab Strait in two.

Perim sits at the narrowest point of the strait – in the middle of a shipping lane that’s become increasingly important since the Iran war began.

With the effective closure of the Strait of Hormuz – a route that accounts for a fifth of the world’s oil supply – Saudi Arabia has had to reroute much of its oil through the East-West pipeline that connects to the Red Sea.

Houthi officials say Red Sea navigation is safe for all shipping companies except for Saudi vessels, pushing up the tension as well as oil prices.

If the Houthis gain control of this waterway, that will put Iran at an advantage and risks further reducing oil supplies which have risen to above $100 a barrel.

The Bab al-Mandab Strait is the southern gateway to a key shipping route that links Asia and Europe via the Red Sea and Suez canal.

Since the US and Israel's war effectively closed the Strait of Hormuz in the Gulf, Saudi Arabia has relied on the Red Sea for oil exports.

The Saudis have been able to ship oil in bulk to customers in Asia using tankers that depart south, past Yemen and the Bab al-Mandab Strait, and out into the open Indian Ocean – but this is now at risk as the Houthis threaten vessels passing by their coast.

The escalation of the conflict between the Houthis, Yemen's government and Saudi Arabia has contributed to a surge in oil prices.

Image source, Getty Images

At least 46,000 people have been displaced in Yemen since fighting escalated last week, the International Organization for Migration (IOM) says.

In an update released today, the IOM adds the "number is alarmingly rising by the hour".

"Families are being forced to flee for the second or third time in this conflict, with almost nothing left," said Amy Pope, IOM Director General.

The latest news comes a day after the Houthis seized the strategic Red Sea port city of Mokha from Saudi-backed pro-government forces, according to military sources and witnesses.

The Houthis said they posed no threat to international shipping but have reiterated their threat to target vessels from Saudi Arabia.

The kingdom has relied on the Red Sea for oil exports since the US and Israel's war effectively closed the Strait of Hormuz in the Gulf.

Yemen's Houthis have reportedly reached Perim Island - an important maritime chokepoint at the mouth of the Red Sea.

The island divides the Bab al-Mandab strait, the southern gateway to a trade route that links Asia and Europe.

Yemeni government forces have, according to officials, withdrawn from the island.

There has been no immediate confirmation from the Houthis that they have reached Perim Island.