The US Navy stopped the vessel and and its four Yemeni crew in international waters on November 8. AFP
The US Navy stopped the vessel and and its four Yemeni crew in international waters on November 8. AFP
The US Navy stopped the vessel and and its four Yemeni crew in international waters on November 8. AFP
The US Navy stopped the vessel and and its four Yemeni crew in international waters on November 8. AFP

US Navy seizes 70 tonnes of missile fuel on ship from Iran to Yemen


Amr Mostafa
  • English
  • Arabic

A fishing vessel smuggling missile fuel and a large quantity of explosives from Iran to Yemen has been intercepted by the US Navy in the Gulf of Oman.

More than 70 tonnes of ammonium perchlorate, a powerful oxidiser commonly used to make rocket and missile fuel, were found, as well as explosives, the Navy said.

The US 5th Fleet stopped the vessel and its four Yemeni crew in international waters on November 8. It was the fleet’s first ever ammonium perchlorate discovery.

“This was a massive amount of explosive material, enough to fuel more than a dozen medium-range ballistic missiles depending on the size,” said Vice Adm Brad Cooper, commander of US Naval Forces Central Command, US 5th Fleet and Combined Maritime Forces.

“The unlawful transfer of lethal aid from Iran does not go unnoticed. It is irresponsible, dangerous and leads to violence and instability across the Middle East.”

The forces also found more than 100 tonnes of urea fertiliser, a chemical compound with agricultural applications that is also uses as an explosive precursor.

“The direct or indirect supply, sale or transfer of weapons to the Houthis violates UN Security Council Resolution 2216 and international law,” Vice Adm Cooper said.

US 5th Fleet previously seized 40 tonnes of urea fertiliser on January 18 on another fishing vessel in the Gulf of Oman that had attempted to smuggle illicit weapons off the coast of Somalia months earlier.

The Houthis seized Yemen’s capital, Sanaa, in September 2014 and forced the internationally recognised government into exile. A Saudi-led coalition entered the war on the side of Yemen’s exiled government in March 2015.

Years of inconclusive fighting has pushed the Arab world’s poorest nation to the brink of famine.

A UN arms embargo has prohibited weapons transfers to the Houthis since 2014. Despite that, Iran has transferred rifles, rocket-propelled grenades, missiles and other weaponry to the Houthis via dhow shipments.

Iran denies arming the Houthis. But independent experts, western nations and UN experts have traced components seized from detained vessels back to Iran.

A six-month ceasefire in Yemen’s war, the longest of the conflict, expired in October despite diplomatic efforts to renew it. That has led to fears fighting could again escalate. More than 150,000 people have been killed in the war, including more than 14,500 civilians.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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