(Bloomberg) — Yemeni President Abdurabuh Mansur Hadi has
left his residence in the southern port city of Aden after
Shiite rebels and their allies advanced on his stronghold.

Mohammed Hadi, an aide who confirmed Hadi’s departure, said
the president was still in Aden but declined to give further
details. The Associated Press, citing unidentified officials,
said he left the city by boat. Fighters loyal to the Houthi
group and former President Ali Abdullah Saleh have captured
Aden’s airport, Al-Masdar’s news website reported.

Hadi’s defeat is a blow to Saudi Arabia, which had vowed to
take action to protect its ally. The kingdom, the world’s top
oil exporter, has accused Iran of fomenting unrest in Yemen.
Saudi shares plunged the most in the world on Wednesday as
Yemen’s crisis worsened.

Mohammed Aidha, a member of the Popular Committees, a
militia loyal to Hadi, said the rebels used tanks in the
fighting at the airport, which came after the Houthis had seized
a major military base on the city’s outskirts.

The prospect of a prolonged conflict increases the risk
that Saudi Arabia and other Gulf Cooperation Council countries
may be drawn into the fighting though political analysts
question whether they are willing to intervene.

Shares Plunge

“The broad story is the GCC doesn’t have many cards to
play,” Steffen Hertog, a Gulf expert and associate professor of
comparative politics at London School of Economics, said by
phone Wednesday. “They don’t have any local partners. They have
Hadi but if he’s thrown out, there’s nothing they can do to
bring him back.”

Before the attack on Aden began, Hadi’s government appealed
for help.

The government is urging allies “to send their fighter
jets, their navies and ground forces if necessary” to stop the
advance of the pro-Iranian Houthi militants, Riad Yaseen, Hadi’s
foreign minister, said in an interview with Al Arabiya
television. He said the Houthis would soon seek to consolidate
their power with the help of Shiite-ruled Iran.

Saudi Arabia’s benchmark Tadawul All Share Index dropped 5
percent, the most since Dec. 16.

The streets of Aden are almost deserted, resident Nabil al-Quaiti said by phone, with all shops closed. Troops opened fire
as local people approached a city arsenal demanding weapons to
defend themselves, he said.

UN Request

Hadi asked the United Nations Security Council on Tuesday
to adopt a resolution allowing “all willing countries” to take
any necessary measures, including military action, to stop the
Houthis’ aggression.

Saudi Foreign Minister Prince Saud al-Faisal said this week
that GCC countries will take “necessary measures to protect the
region” from the Houthis. The six-nation GCC includes Saudi
Arabia, the United Arab Emirates, Qatar, Kuwait, Oman and
Bahrain.

The Houthis marched from their northern base to capture the
capital, Sana’a, last year. The group then moved to strengthen
ties with Iran, sending a delegation this month to Tehran to
discuss economic cooperation and starting direct flights with
the Iranian capital.

The Houthis, who follow the Zaydi branch of Shiite Islam,
say they operate independently of Iran and represent only their
group’s interests. U.S. officials have said that Iran’s role in
Yemen is a concern.

The rebels want “to take over Aden to end what’s left of
President Hadi’s legitimacy and to make their coup an undisputed
reality on the ground,” said Fouad Mossad, an Aden-based
analyst, by phone. “Even if the city falls, it will not be safe
because there is large support for Hadi among the tribes here.”

To contact the reporters on this story:
Glen Carey in Riyadh at
gcarey8@bloomberg.net;
Mohammed Hatem in San’aa at
mhatem1@bloomberg.net

To contact the editors responsible for this story:
Alaa Shahine at
asalha@bloomberg.net
Mark Williams, Ben Holland