Executive Summary

The war in Yemen is escalating along with an increase of Houthi attacks on Saudi Arabia. Following the 04 October initiation of a Saudi-backed Yemen counteroffensive, threats to Saudi Arabia are likely to escalate as the Houthis seek to increase the economic and political costs on Saudi Arabia. Global Guardian does not assess that upcoming major international conferences, including the Future Investment Initiative (FII) Conference, will be deliberately targeted by the Houthis. However, the Houthis have already intensified their cross-border attacks on Saudi airports, including three recent strikes on Riyadh King Khalid International Airport (RUH), and further attacks are likely in the coming days and weeks.

The Houthis’ primary targets in Saudi Arabia are oil and gas infrastructure and airports. Excluding the provinces of Aseer, Jazan, and Najran, the main threats facing travelers visiting Saudi Arabia are conflict-related flight delays and falling debris from interceptions. Saudi interceptors have largely been successful, but the Saudi government is censoring media around these events making it difficult to verify Houthi strikes. Repeated successful strikes on Saudi cities would indicate that the Houthi anti-Saudi strategy has shifted, raising the risks to personnel on the ground.

Two months ago, Brazilian President Luiz Inácio Lula da Silva looked set to win Brazil's presidential election and earn an unprecedented fourth term. However, with less than a week until the first round of voting, a far-reaching corruption scandal has once again struck Brazilian politics, tightening the polling gap of an election that will dictate the direction of Brazilian security policy and the Supreme Court.

Persian Gulf oil exports in September reached approximately 80% of prewar levels, nearing 13 million barrels per day. The increase is largely due to Saudi Aramco and Kuwait Oil Company following Abu Dhabi National Oil Company's model of using ship-to-ship transfers in the Gulf of Oman. As a result, Riyadh exported 6 million barrels per day in September, the highest volume since the war began. In addition, after being damaged and taken offline on 10 September, Saudi Arabia's East-West Pipeline resumed operations on 22 September and is currently operating at 3.5 million barrels a day.

There are several possible indications that the conflict in the Middle East is imminently set to expand. On 19 September, the United States Department of State issued a region-wide security alert for the Middle East, warning Americans that the conflict between Saudi Arabia and the Houthis could “escalate rapidly,” also notifying travelers that flights may be impacted by the fighting. The warning comes after the Houthis attacked Riyadh for the first time, hitting a fuel storage tank at the airport. Airspace was briefly disrupted.

Global energy is coming under increasing strain as Saudi Arabia was forced to suspend its East-West Pipeline, and the Houthis captured the remainder of Yemen’s Red Sea coastline. With approximately 12 million barrels per day flowing through the Strait of Hormuz, including during the daytime, Iran's "Axis of Resistance" has turned its sights on the Arabian Peninsula to exert economic pressure. Over the past month, Brent's price has risen 17.55%, with Brent Crude reaching $107 and diesel in the U.S. exceeding $6 per gallon for the first time ever.

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U.S.–Iran maritime attacks in the Strait of Hormuz are escalating as the Iran-backed Houthis in Yemen increasingly target Saudi oil facilities. On 09 September, the Iranian Islamic Revolutionary Guard Corps (IRGC) claims to have struck eight tankers. The UK Maritime Trade Operations (UKMTO), based in Dubai, UAE, confirmed that several merchant vessels were disabled. In addition, Iran launched a ballistic missile attack on U.S. bases in Jordan, with the Jordanian Armed Forces claiming to have intercepted 18 of 20 missiles. These attacks are the latest in a series of tit-for-tat exchanges between the U.S. and Iran and an extension of the U.S. "tanker for tanker" doctrine where Iranian attacks on commercial ships, and now U.S. naval vessels, elicit American attacks on Iranian tankers.

On 30 August, the United States (U.S.) ended over a month of calm by striking Iranian rocket launchers armed with sea mines on Larak Island. Three Iranian soldiers were killed in the incident, and Iran retaliated with missiles fired at U.S. bases in Jordan. All missiles were either intercepted or posed no threat. The resumption of tit-for-tat exchanges follows Iran increasing its rate of attacking commercial vessels transiting the Strait of Hormuz using the southern Omani route, having attacked three tankers between 30 and 31 August.

It has been 28 days since the United States (U.S.) and Iran last exchanged fire. Axios reported last night that Secretary Rubio has been telling his foreign counterparts that "for the time being" the U.S. is expected to focus on economic sanctions and renewed diplomacy rather than additional strikes. When combined with yesterday's news that the U.S. is returning Foreign Service Officers (FSO) to U.S. Embassies in the region, the outlook for decreased risk of renewed conflict grows more positive. 

• Global Guardian recommends firms carefully consider travel to the region amid lessened risk of renewed conflict in the near term. 
  
• The 28-day streak appears likely to continue; however, an "October Surprise" from Iran remains a possibility as noted later in this update.
  

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In Global Guardian's monthly Risk Barometer, our Intelligence Team highlights current global hotspots with the potential to impact your business operations and travel. Read below for analysis on the threats we are closely monitoring this month and click here to subscribe for regular intelligence updates.