Yemeni Oil Minister: Decline in Oil Revenues Pressures State Budget
Yemen's Oil and Minerals Minister Aws al-Awd revealed that the decline in global demand for oil due to the coronavirus pandemic had put pressure on the Yemeni government’s treasury.
Revenues from oil exports represent a fundamental pillar in supporting the economy and the public treasury, he explained.
In an exclusive interview with Asharq Al-Awsat, al-Awd confirmed that oil exploration operations in Yemen have covered 20 percent of the overall oil map.
He also clarified that Yemeni oil is usually exported to southeast Asian countries, Italy and Australia while the top importer of Yemeni oil is China.
“Oil export revenues are directly deposited to an account at the Central Bank of Yemen and are considered a pillar and support for the state treasury,” al-Awd said, noting that the resource is needed to improve the national economy and cover the payrolls in the public sector.
He further explained how the coronavirus pandemic impacted global economies and how plummeting oil prices negatively affected the national revenues of Yemen in the past few months, laying more pressure on the state budget.
“The serious decision of OPEC+ countries to reduce crude oil production contributed to the gradual improvement of world oil prices despite the ongoing huge pressure,” al-Awd noted.
He also pointed out to the catastrophic consequences should an oil spill occur at the derelict Safer oil tanker, demanding a swift intervention by regional countries and the international community.
In its current run-down state, the tanker poses a threat to Red Sea marine life, al-Awd stressed, adding that the ministry of oil and minerals is currently working with all parties to empty the oil tanker.
“The Yemeni government is still exerting efforts alongside UN and regional players to pressure Houthi militias into immediately granting access to a UN assessment team to inspect the oil tanker and perform maintenance work on the floating platform,” al-Awd said, adding that thus far, Houthis have rejected to cooperate with these efforts.
The Safer oil tanker is docked 60km north of Yemen's port city of Hodeidah and suffers from poor maintenance since the war broke out some five years ago.
Experts warn that an oil spill at Safer could affect territorial waters for generations to come.