AGSI’s Robert Mogielnicki on the import side of Saudi’s blockade

Whether Saudi oil can get out has been the primary concern of the double-strait squeeze, but the quieter question is what that same squeeze does to what comes in. Both of Saudi Arabia’s saltwater exits are under pressure at once — the Strait of Hormuz throttled since February, Bab Al Mandeb under a declared Houthi blockade since 20 July — and more than 80% of the Kingdom’s imported food arrives by sea, through Jeddah and Dammam. We put the import side of the blockade to Dr. Robert Mogielnicki, founder of PoliSphere Advisory and non-resident fellow at the Arab Gulf States Institute. Edited excerpts from our conversation:

EnterpriseAM: More than 80% of the Kingdom’s imported food comes through Jeddah and Dammam. With both coasts now under threat, how exposed are those food imports and how much flexibility does the system actually have?

Robert Mogielnicki: Enhancing food security has been a longstanding priority for the Saudis, but clearly there are urgent concerns around getting critical imports into the country. I’d say the situation reflects more potential constraint management than crisis at this time. Saudi Arabia has used previous shocks, especially from the coronavirus pandemic, to increase its food security resilience.

E: For businesses and investors watching their exposure to Saudi ports and trade, what should they be focused on right now?

RM: Houthi actions in the Red Sea and the Iran war implications for the Strait of Hormuz have linkages, but the two theaters have their own set of complicated dynamics at play. While the linkages are important, understanding the varying interests at stake and motivations of key actors is really what’s critical.

Any operator or investor who wants a simple, easy answer will struggle to put that information to good use. That said, the scope and scale of Houthi behavior in the Red Sea alongside the trajectory of the Iran war are the most important regional issues to watch from a scenario-tracking perspective.

So many red lines have been crossed and unprecedented events witnessed in the Middle East recently. Geopolitical significance and impact these days tend to be less about the events themselves, and more about how they unfold and where they are headed.

E: Saudi ports have quietly served neighbors with no Red Sea or Hormuz alternative of their own. Now that the Kingdom is directly involved in the conflict and both straits are contested, what’s the ripple effect on the wider Gulf?

RM: Saudi Arabia’s geography will ensure the country continues to be a key part of other Gulf countries’ critical infrastructure buildout. But renewed Houthi tensions will push other Gulf countries to maximize their domestic capabilities, as reliance on external actors comes with its own risks. Meanwhile, alternative Levant energy export routes stand to grow in importance for as long as the Houthis remain actively disruptive.