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Saudi Oil Facilities Attack Has Created International Risks

Saudi Oil Facilities Attack Has Created International Risks

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By William Tucker
Columnist, In Homeland Security

What we know: Saudi Arabia’s Aramco crude oil facilities in Abqaiq and Khurais were attacked on Sept. 14, cutting oil production by nearly six million barrels a day. That is half of what Saudi Arabia produces daily and it significantly cuts into the global oil supply. Indeed, this attack caused the largest ever disruption to global oil production.

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Yemen’s Houthi rebels claimed responsibility for the attack using 10 armed drones. Houthi forces have been launching missiles into Saudi Arabia since the Kingdom’s intervention into Yemen’s most recent civil war in 2015. The missiles have caused some casualties and infrastructure damage.

However, the damage attack appears to have been the work of weaponry far exceeding the UAV capabilities that the Houthis are known to have. Regardless, the bulk of the Houthis’ more sophisticated weaponry comes from Iran. It appears, at least according to U.S. intelligence, that these attacks did not originate in Yemen.

An unnamed intelligence official speaking with the media stated that the attack originated in Iran and used cruise missiles, while other sources within the U.S. mention both UAVs and missiles. Secretary of State Mike Pompeo likewise accused Iran of orchestrating the attack, but has yet to provide any evidence. The Trump administration plans to release evidence of Iranian complicity during the ongoing annual UN General Assembly session in New York, perhaps as early as September 24.

Saudi Arabia, for its part, invited international investigators to explore the site of the attack, stating that the Kingdom has the military capability to respond and maintain the nation’s stability. At the  same time, the attack has caused Aramco to warn its customers that crude oil shipments would be delayed at least through October. In the face of a slowing global economy such a setback in energy supplies and the jump in prices will take a heavy toll on some economies. China and several European nations facing technical recessions heavily depend on Saudi crude so it is nearly certain that this energy crunch will be painful.

If It Was Iran, What Does Tehran Gain?

Iran is in a bad situation. It’s serious, but not necessarily existential. Iran’s economy took a significant hit when the U.S. pulled out of the Joint Comprehensve Plan of Action (JPCOA), also known as the Iran nuclear deal, and re-imposed sanctions. The secondary effect of the U.S. sanctions would likewise target those nations that continue to do business with Tehran. This move left Iran in the cold and, although the other signatories of the Iran deal wanted to continue with the agreement, the economic heft of the U.S. is impossible to ignore.

Most of the Iranian economy revolves around foreign oil sales. Without that revenue, the Iranian government has to slash its budget. That would have a negative effect on Iran’s regional endeavors, too. Iran has worked hard to spread its influence throughout the region, especially in Iraq, Syria and Lebanon. Under the JPCOA, Iran had enough bandwidth to bolster its efforts, but the U.S. withdrawal from the JPCOA jeopardized that effort. Iran, however, is not one to readily capitulate.

Recently, Iran announced that it will not speak directly with the U.S. until Washington lifts all sanctions. In other words, Iran is willing to talk only on its terms. The only option Iran has is to use whatever assets it has to cause pain and try to strong-arm the U.S. If this attack on Saudi Arabia did indeed originate in Iran, then Tehran has succeeded in causing pain in a rather sensitive area of the global economy.

The risk of that attack provoking an armed response is rather high. Saudi Arabia does have the military might to strike back at some Iranian interests, perhaps even the location from where the missiles launched. But the Saudis are unlikely to have the ability to maintain a high operational tempo for long. Despite Saudi Arabia’s capabilities, retaliation could escalate to the point of devastating Riyadh.

Iran’s Big Gamble Is Provoking a US Military Response

Iran’s big gamble is provoking a U.S. military response. Again, should the U.S. decide to engage Iran militarily, the risk is that the conflict could escalate beyond what Washington is willing to invest. It is entirely possible that Iran will consider these arresting factors for retaliation before launching any attack. Iran has only a limited set of options to begin with and every potential play carries its own danger of blowback.

The U.S. strategy of maximum pressure on Iran is a containment strategy by any other name. This does not mean that Washington will be able to restrict all actions taken by Iran; rather, the U.S. will likely to seek to stymie or balance any threat.

Under the JPCOA, the U.S. allowed Iran to spread its influence in the region, but without the backing of a nuclear threat. The problem with that strategy was Iran had no balance. The Arab states are too fractious to coalesce into a meaningful coalition. Besides, Turkey, another option to counter Iran, was too busy with its economic problems and fallout from the Syrian war.

Under the Trump administration, weakening the Islamic Republic seemed the most plausible way to roll back Iranian influence, but that too is fraught with risk. Additionally, the U.S. interest in the region has shifted in the past decade, not just from the drawn out military occupations.  U.S. domestic oil production has increased so much that Washington can reduce its footprint in the region.

This does not mean that the U.S. has no interest in the region; rather, it means that the U.S. will change how it interacts with the Middle East. In this case, the challenge for the U.S. is that the oil refinery attack will affect the global economy at a vulnerable time. Washington must find a way to ensure that its maximum pressure campaign still appears viable.

These are not easy challenges to handle, international relations never are. But there is an inherent volatility in the current situation. President Trump has expressed his desire not to go to war. However, it is always wise to remember that other interested parties get a vote, too. Iran could easily take another calculated risk, or Saudi Arabia might up the ante in pursuit of its interests.

Any way you view this situation, the risks associated with a response are high, but so too is the risk of doing nothing.

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