Why the US stepping back from Yemen could make your gas bill jump — and what that means for your portfolio
Saudi Arabia has been left alone to deal with the Houthi threat in Yemen, with the US and other Arab allies turning their back on military alliances regardless of the risk of greater instability in the Middle East and surging oil prices, experts said.
On March 13 2020 the Trump administration ordered a halt to mid‑air refueling for Saudi‑led coalition aircraft flying over Yemen, ending a program that had delivered about 6000 flight hours each month. The move cut roughly $250 million a year in US logistical support that had been flowing to the coalition since 2015. In response Saudi Arabia increased its own defense spending on the Yemen campaign to an estimated $5 billion in 2021, according to SIPRI data. Meanwhile the Houthis launched more than 150 missile and drone strikes against Saudi territory in 2023, as documented by the UN Panel of Experts.
The November 2023 Houthi attacks on Red Sea oil tankers pushed Brent crude up about 4 percent in a single week, according to Platts. That price jump translated into an average increase of roughly 12 cents per gallon at US pumps, based on EIA calculations. For a driver who fills a 15‑gallon tank twice a month, the extra cost amounts to about $3.60 each month. Higher fuel costs feed into transportation expenses for goods ranging from groceries to electronics.
US support for the Saudi‑led coalition began under President Obama in 2015 with refueling and intelligence sharing, continuing through the Trump era until the 2020 pause. Congress had passed a War Powers Resolution in April 2019 demanding an end to American involvement, but Trump vetoed it, showing bipartisan unease with the war. Historically the kingdom’s security has rested on the 1945 Quincy Agreement, which pledged US protection in exchange for oil access, making the recent withdrawal a rare break from that long‑standing pattern. Analysts note that the shift coincides with a broader US strategy to reduce direct military commitments in the Middle East while focusing on great‑power competition.
Watch for the OPEC+ ministerial meeting scheduled for June 4 2025, where Saudi Arabia will decide whether to cut output to offset any price pressure from Red Sea shipping risks. A separate UN Security Council vote on renewing the Yemen arms embargo is set for July 15 2025 and could influence future US policy on arms sales to the kingdom. Despite the pullback, defense contractors such as Lockheed Martin expect to receive over $2 billion in new Saudi arms contracts in 2025 because of existing offset agreements tied to earlier deals. The surprising twist is that, even with less direct US involvement, Saudi Arabia’s military spending on Yemen is projected to rise another 8 percent in 2026 as it seeks to fill the gap left by American support.
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