It consisted of the port city of Aden and also included the outlying islands of Kamaran, Perim and the Khuria Muria archipelago with a total area of 192 km2 (74 sq mi).

Its strategic position at the entrance to the Red Sea made it a vital stopover for ships traveling between Europe, India, and the Far East, especially after the opening of the Suez Canal in 1869.

Economic inequality, labor strikes, and the rise of Arab nationalism contributed to increasing tensions, which were intensified by the anti-colonial sentiment in the Middle East.

The British Government thereafter considered Aden to be an important settlement due to its location, as the Royal Navy could easily access the port for resupply and repairs.

On 27 April 1954, Queen Elizabeth II and her husband Prince Philip, Duke of Edinburgh visited the colony as part of their first Commonwealth tour.

[7] The visit saw Aden hold its first and only knighthood ceremony in which local leader Sayyid Abubakr bin Shaikh Al-Kaff was knighted whilst kneeling on a chair instead of bowing due to his Muslim faith.

[7] The hospital which was originally named after her until the end of British rule in 1967 was bombed by the Houthi movement in 2015, but remains open due to a UAE-funded restoration project.

The town of Aden was noted as being tied "much more closely into the fabric of the British Empire", with a faster rate of development, than the area surrounding it.

This was equivalent to around £58 per capita, one of the highest per head revenue earners amongst Britain's smaller colonies behind only the Falkland Islands, Brunei and Bermuda.

[24] Minor events continued into early 1956, when a British assistant adviser to part of the Western Aden Protectorate was wounded in a rebel ambush.

It was during this time that the Army took over command of Aden from the Royal Air Force, with its presence maintained "in view of the importance of preserving internal security" according to War Secretary Antony Head.

[28] Days after the strike had ended, the Governor Sir Tom Hickinbotham conferred with almost all of the tribal leaders from the Aden Protectorates, where broad agreement was reached that they should "seek some form of close association with each other".

However, in October 1958 there was a general strike, which was accompanied by widespread rioting and disorder which ended in the deportation of 240 Yemenis from Aden, as claimed by author Gillian King: "By ignoring the views of the local labour force, the British pushed much of the Arab population into opposition against their rule, who previously had been by no means captivated by Nasser".

Men who had long lived in isolation now found a common political language and a breathtaking, liberating community of sentiment across the Arab world".

[citation needed] During the Second World War, Jews from Yemen flocked in large numbers into Aden while en route to Palestine, where they were placed in refugee camps, primarily for their own safety.

[34] The 1948 Arab–Israeli War made immigration into Israel very difficult, as the Red Sea and Suez Canal were closed by the Egyptian government.

By 1949 and after the declaration of a cease fire, 12,000 Jews from Yemen, Aden and the Protectorate were gathered in camps, from where they were airlifted on average 300 a day to Israel, in Operation Magic Carpet.

[35] By 1958, Aden was the second-busiest harbour in the world, after New York City, described as having importance that "cannot be overestimated" while protecting British oil interests in the region.

[37] "As a temporary expedient, the Aden base has the merits of a stabiliser at a moment when the Yemen is split by civil war, when the Saudi Royal house has not yet made itself a name for consistent rule, when the Iraqi and Syrian governments are prone to overnight revolutions and when Egypt's relations with both of them are uncertain".

Previously to the creation of the UAR, peace in Aden it was admitted came not from the presence of the tiny garrison, but from a lack of Arab poles of attraction for malcontents.

However some contemporary writers, such as Elizabeth Monroe thought that the British presence in Aden may have been self-defeating, as it provided a casus belli for Arab nationalists.

"As in Kuwait prosperous older men appreciate the advantages of the British connection, but young Arab nationalists and a vigorous trade union movement think it humiliating".

In June 1972, the British Prime Minister Edward Heath unilaterally reduced the sterling area to include only the United Kingdom, the Isle of Man, the Channel Islands and Ireland (and Gibraltar the following year).

It was hoped that this would lessen Arab calls for complete independence, while still allowing British control of foreign affairs and the BP refinery at Little Aden to continue.

[44] Federalism was first proposed by ministers from both the colony and protectorates, the suggested amalgamation would be beneficial they argued, in terms of economics, race, religion and languages.

[46] On 18 January 1963, the colony was reconstituted as the State of Aden (Arabic: ولاية عدن Wilāyat ʿAdan), within the new Federation of South Arabia.

The federation became the People's Republic of Southern Yemen, and in line with other formerly British Arab territories in the Middle East, it did not join the Commonwealth of Nations.