N. Yemen poised between Saudis and South Yemen

"I know we have oil," says a North Yemeni oil trucker on his way from the major port city of Hodeida to the capital of Sanaa, "but the Saudis have paid off the oil companies not to develop our oil resources."

The Saudi conspiracy theory is a view echoed in many segments of North Yemeni society, even in high government levels, although there is no hard evidence showing substantial oil reserves in North Yemen.

But this tiny country, wedged in the southwestern tip of the Arabian Peninsula, remains suspicious of its dominant oil-rich Saudi neighbor all the same. And North Yemen's foreign policy continues to be to maintain a fragile balance between conservative Saudi Arabia on one side and Marxist South Yemen on the other. (South Yemen has just undergone a leadership change that may mean it is less Soviet-oriented than before.)

According to well-placed Yemeni and Western sources, Soviet arms continue to pour into Hodeida, and for the indefinite future the number of Russian advisers in North Yemen -- currently more than 100 -- will remain the same.

In fact, according to one Yemeni source, North Yemen has just concluded a new deal to expand military and economic ties with the Soviet Union, and the recently reported pact with Saudi Arabia is but a six-month extension of existing agreements.

The Russians have been offering the North Yemenis plentiful supplies of arms at low rates. For every tank the US has sold North Yemen following the March 1979 border clash with South Yemen, the Soviet Union has sold North Yemen four tanks at one-third their market value.