Its strategic location at the entrance to the Bab al-Mandab Strait has incentivised various countries to establish military bases in the small African nation
Three factors that limit optimism over the deal are Iran's radicals, China's unwillingness to play a more significant security role in the region and Israel's fear over Iran's nuclear programme
Legislation to fund the American military and intelligence services will include requirements that Israeli defence firms be involved in sensitive projects and that classified information be shared
Even if diplomatic progress continues, the Strait could be closed again. As a result, the geopolitical risk premium attached to Gulf energy exports is unlikely to disappear entirely.