Fuel price surge from Iran war throws Yemeni laborers out of work

Taiz, Yemen – Fuad Mohammed, a 46-year-old construction worker with more than 25 years of experience, has watched Yemen’s building industry deteriorate since the civil war erupted over a decade ago — and worsen sharply after the US-Israel war with Iran broke out in late February, sending economic shockwaves across the region.

“We are barely surviving,” Fuad told Al Jazeera.

The regional war has battered the economies of many Middle Eastern countries, with government-controlled areas of Yemen bearing a heavy burden as commodity prices soar. The fuel sector has been hit hardest: In January, 20 liters of diesel cost 25,000 riyals (US$17); now it has rocketed to 45,000 riyals (US$30). The price spike has triggered a chain reaction, raising the cost of all goods and services that depend on fuel and transport, including construction.

Numerous construction projects in eastern and southwestern Yemen have ground to a halt. Fuad said that before the Iran war, he could find work about two weeks a month, but this year he has gone months with almost no jobs. “The rise in building material prices has hit both homeowners and workers hard. People who want to build find their budgets no longer stretch, and we lose our jobs.”

For example, the price of a truckload of sand has climbed from 130,000 riyals (US$87) to 190,000 riyals (US$127); a square meter of window glass rose from 90,000 riyals (US$60) to 130,000 riyals (US$87). In desperation, Fuad has cut his daily wage from 25,000 riyals (US$17) to 20,000 riyals (US$13).

An official at the Yemen Petroleum Company in Aden said the diesel price hike is due to a supply crunch and soaring global fuel prices, compounded by the closure of the Strait of Hormuz and higher shipping and insurance costs. Wafeeq Saleh, executive director of the Taiz Center for Gulf Research, explained: “Yemen imports nearly 90 percent of its needs, so any disruption in global commodity markets directly affects the domestic market.”

Meanwhile, in areas controlled by the Houthi forces, including the capital Sanaa, fuel prices have not yet risen sharply, thanks to stockpiles built up in previous months. However, according to Saleh, the impact will appear soon as imports priced at the new rates arrive. The Houthis themselves, an Iran-aligned group, have contributed to pushing global oil prices above US$100 per barrel for the first time since May by launching attacks on Saudi ships in the Red Sea.

Lutf Zuraiqi, 58, has put his home construction project on hold because of soaring costs. He hopes an end to the war will cool material prices. In contrast, contractor Mohammed Jameel, 59, with more than 40 years of experience, says he has “never seen building material prices come down” and advises homeowners to keep building. He has had to cut his prices and reduce his profit margins to keep working.

“We are all in the same boat, not just the daily wage laborers,” Jameel said. “But we hope things will get better.”