White flag

12 October 2016 By Andy Critchlow

The kingdom’s fight against Houthi militants in Yemen is a burden on finances strained by cheap crude. Persisting with its expensive military adventure may require Riyadh to let oil prices rise further. Otherwise real-world battles may spill over into the economic kind.

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Reuters reported on Oct. 10 that the U.S. government has authorised $22.2 billion in weapons sales to Riyadh since March 2015. These include precision munitions meant to replenish stocks used in Yemen.

The kingdom is leading a coalition of Gulf allies in a war against Iranian-aligned Houthi militants in Yemen, which lies on the kingdom's southern border. Washington recently issued a rebuke after at least 140 funeral mourners were killed in an alleged strike by Saudi-led warplanes in Sanaa, Reuters reported on Oct. 8.

As the Yemen conflict continues, Saudi has started to push for an oil supply freeze within the Organization of the Petroleum Exporting Countries. Previous attempts by the cartel to limit output had been blocked by the kingdom's defence minister and deputy crown prince Mohammed bin Salman.

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