Instant View: Saudi Arabia coalition air strikes in Yemen risks wider conflict

(Reuters) - Saudi Arabia announced on Wednesday it had launched military operations in Yemen, carrying out air strikes in coordination with a 10-country coalition seeking to beat back Houthi militia forces besieging the southern city of Aden where the country's president had taken refuge. With the Saudi-led military assault, the Middle East's top oil power has been drawn into the worsening Yemeni conflict. The crisis risks spiraling into a proxy war with Shi'ite Iran backing the Houthis, whose leaders adhere to the branch of Shi'ite Islam, and Saudi Arabia and the other regional Sunni Muslim monarchies backing Yemen President Abd-Rabbu Mansour Hadi. COMMENTARY: JOHN MCCARTHY, PRESIDENT OF THE AUSTRALIA INSTITUTE OF INTERNATIONAL AFFAIRS "Saudi Arabia is worried that Yemen will become a proxy for Iran, essentially taking control of what had been a Sunni-dominated country congenial to Saudi’s interest. Saudi is looking at Iran’s advances in Iraq and I think they are finding themselves squeezed by a country that they regard as their chief rival for regional dominance. I wouldn’t be surprised to see Saudi ground support at some stage. In the absence of the Americans, who have temporarily quit the field, the Saudi’s will think they have no choice but to go in pretty hard. We are going to see redesign of the region." RODGER SHANAHAN, ASSOCIATE PROFESSOR, RESEARCH FELLOW AT THE LOWY INSTITUTE "I would be surprised if they become committed to any large-scale ground force because it is such a complex society. The last time they came up against the Houthis, who are less powerful, their ground forces didn’t perform particularly well. SUSANNE DAHLGREN, VISITING RESEARCH ASSOCIATE PROFESSOR IN THE MIDDLE EAST INSTITUTE, NATIONAL UNIVERSITY OF SINGAPORE "In 2009 the Saudi air force was used to help the Yemeni army in fighting the Houthis, but they did not win. So the Saudis must be extra careful now. So far they have not bombed the populous south. I hope they keep it that way for a long time. It is vital that the majority of Yemeni people accept the military intervention." LI GUOFU, DIRECTOR OF THE CENTRE FOR MIDDLE EAST STUDIES AT THE CHINA INSTITUTE OF INTERNATIONAL STUDIES "China is concerned very much about the situation in Yemen and has supported the Saudi initiative to get all sides into negotiations. The Saudis have taken military action because they have said the Houthis are getting support from the Iranians .... This is an indication that the war may gradually spread into a regional conflict. This is something the Chinese government is very much concerned about." TONY NUNAN, A RISK MANAGER AT MITSUBISHI CORP IN TOKYO "There is a big confrontation between Iran and Saudi, between Sunni and Shi'ite in Syria and Iraq. This is more evidence that the geopolitical risk in the Middle East has become chronic." MASAKI SUEMATSU, MANAGER OF THE ENERGY TEAM AT BROKERAGE NEWEDGE JAPAN IN TOKYO "Just because Saudi Arabia and others conducted air strikes doesn't mean the oil market becomes suddenly tight. But there will be repercussions. If Saudi's oil facilities are attacked, the impact would be huge." TOM O'SULLIVAN, FOUNDER OF INDEPENDENT ENERGY CONSULTANT MATHYOS JAPAN "It adds to overall Middle East instability at least in the short-term and there is the possibility of Al Qaeda/Islamic State/Houthi reprisals into Saudi Arabia. It is unfortunately one more recent example of a failed state in the region, the others being Iraq, Syria, and Libya." NORIHIRO FUJITO, SENIOR INVESTMENT ANALYST AT MITSUBISHI UFJ MORGAN STANLEY SECURITIES "For now, Iran's reaction would be a focus. I just hope Iran would not overreact to this. If a proxy war becomes a real war, the entire Middle East will be engulfed in a war, even though I do not think that is likely." JANG JI-HYANG, DIRECTOR, MIDDLE EAST AND NORTH AFRICA CENTER AT THE ASAN INSTITUTE FOR POLICY STUDIES IN SEOUL "Why now? Saudi Arabia is disgruntled with nuclear talks between Iran and the United States that appear to be progressing. But Iran isn't likely to respond to the Saudi operation in Yemen, because they don't want to be a troublemaker by getting involved in conflicts while a nuclear deal is pending." MARKET REACTION: Crude oil jumped more than $3 to $59.71 a barrel after Saudi Arabia and its allies launch air strikes in Yemen.[O/R] BACKGROUND: - If Yemen's conflict draws in Saudi Arabia and rival Iran it might ignite a proxy war on the Arabian peninsula, home to the world's biggest oilfields, and pour more fuel on a sectarian conflagration driving multiple wars around the Middle East. - Western strategists grappling with complex conflicts in Iraq and Syria would be further confounded by fresh instability at a sensitive moment ahead of a possible nuclear deal between world powers and Tehran. - The sudden rise to power in Yemen of the Iranian-allied Houthi militia means that Saudi Arabia's most populous neighbors, Yemen and Iraq, are now dominated by the Sunni Muslim kingdom's biggest regional rival, Shi'ite Tehran. - That reality raises hackles in Riyadh, which sees the Shi'ite theocracy in Tehran as a regional troublemaker. - This worst case scenario - sectarian war with foreign powers backing opposing sides - would deepen already grave humanitarian suffering in the impoverished country and endanger strategic shipping lanes. (Reporting by Ju-min Park and Meeyoung Cho in SEOUL and Aaron Sheldrick and Hideyuki Sano in TOKYO; Editing by Dean Yates and Michael Perry)