11 | NOV | 2019
Drone attacks on Saudi Arabia increase the danger of major war in the Middle East
Workers are seen at the damaged site of Saudi Aramco oil facility in Abqaiq, Saudi Arabia - Photo: Hamad l Mohammed/REUTERS

Drone attacks on Saudi Arabia increase the danger of major war in the Middle East

20/09/2019
16:09
Gabriel Moyssen
Mexico City
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After four years of bombarding and starving the Yemeni people with virtual impunity, Saudi Arabia is on the front line due to the bold drone attack on its territory

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After four years of bombarding and starving the Yemeni people with virtual impunity, Saudi Arabia is on the front line due to the bold drone attack on its territory that shut down 5% of the world’s daily oil production, increasing at the same time the danger of a major war in the Middle East.
 

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Saudi Arabia attack triggers the biggest jump in oil prices in almost 30 years

The attack heightened uncertainty in a market that had become relatively subdued in recent months & now faces the loss of crude from Saudi Arabia, traditionally the world’s supplier of last resort
Saudi Arabia attack triggers the biggest jump in oil prices in almost 30 yearsSaudi Arabia attack triggers the biggest jump in oil prices in almost 30 years

Last Saturday, ten suicide drones from Yemen’s Houthi government raided two critical Saudi oil installations affecting almost 5.7 million barrels of crude production a day, according to the state-run company Saudi Aramco.

The kingdom’s Energy Minister said the attacks also led to a halt in gas production, which is set to reduce the supply of ethane and natural gas liquids by 50%.

Sources close to the industry told the return to full oil capacity could takeweeks, not days.”

Saudi Arabia—or its customers—may use stockpiles to keep oil supplies flowing in the short term, while the United States is ready to release petroleum from its strategic reserve if needed; however, for oil markets, it is the single worst sudden disruption ever, surpassing the loss of Kuwaiti and Iraqi oil supply in 1990, when Baghdad invaded its neighbor, said the U.S. Department of Energy.

The benchmark oil futures jumped as much as USD $11.73 a barrel to USD $71.95 as the market opened Monday in Asia, the biggest advance in dollar-terms since futures started trading in 1988.

On Tuesday, nevertheless, oil prices fall 6% after the historic surge as the Saudi Energy Minister Abdulaziz bin Salman said that production capabilities were “fully restored,” and that oil output will be back to pre-attack levels by the end of September.

For its part, gold and silver prices increased more than 1% as investors fled to safe-haven assets. Spot gold jumped 1.27% to USD $1,507.40 per ounce; spot silver—the metal is used in the production of consumer electronic goods, as well as in the industrial sector—gained 2.96% to USD $17.94 per ounce.

The target Abqaiq oil and gas refinery handles crude from the world’s largest conventional oilfield, Ghawar, and for export to terminals Ras Tanura—the biggest offshore oil loading facility—and Juaymah. It also pumps oil westwards across Saudi Arabia to Red Sea export terminals.

The second target was a processing plant near Khurais,190 km further southwest. Both installations are more than 1,000 km from Yemen.

Yahia Sarie, Houthi armed forces spokesman, claimed responsibility for the airstrike warning Riyadh that future operations “will expand further and be more painful than ever as long as it continues its aggression and siege.”

He said that the raid came after an accurate intelligence operation “and advance monitoring and cooperation of honorable and free men within the kingdom,” implying the support from disaffected Saudis which the Moon of Alabama website relates with former Energy Minister Khalid al-Falih replaced by Bin Salman, half-brother of the Crown Prince Mohammad bin Salman (MBS), the de facto Saudi ruler.

Saudi Aramco for sale

Al-Falih was opposed to the renewed “modernization plans” to sell a share of Saudi Aramco—and the country’s wealth—to foreign investors, promoted by MBS, who is also the architect of the failed Yemen invasion that has left nearly 100,000 dead and the worst international humanitarian catastrophe.

After the drones destroyed at least 19 points with great precision, the privatization program would be delayed, since as Citigroup Inc.’s Ed Morse wrote in a research note, “no matter whether it takes Saudi Arabia five days or a lot longer to get oil back into production, there is but one rational takeaway from the attacks on the kingdom’s infrastructure—that infrastructure is highly vulnerable to attack, and the market has been persistently mispricing oil.”

This is one of the reasons for the Saudi accusations against rival Iran for the attack, repeated by Trump administration’s officials without evidence. They claim that the drone launch area was north-northwest of the targets—the direction of Iran and Iraqnot south from Yemen, while Saudi sources said there are signs that cruise missiles were also used.

In reality, the Houthis have been hitting targets deep inside Saudi Arabia in the last two years using missiles from the old Yemeni army arsenal, as well as drones provided by Tehran.

Defense experts underscore that modern drones are cheap and relatively simple, as opposed to the billions spent by Riyadh and its main ally, the United Arab Emirates, in Western military hardware. The Houthi drones are based on Iranian designs, only modified to meet their specific requirements.

Nevertheless, other sources have insisted on the intervention of pro-Iranian Shia militias in Iraq that received Yasir Unmanned Aerial Vehicles (UAV) based on the Boeing Insitu ScanEagle.

Yasir UAV has an endurance of 8 to 20 hours, making it more than capable of flying from southern Iraq to the Saudi oil refineries.

The cruise missile is believed to be a version of the Quds-1, combined in the attack to confuse Saudi and U.S. radars.

In the context of heightened tensions in the Middle East and the constant pressure on Washington from Saudi Arabia and Israel to attack Iran once and for all, the raid on the Abqaiq and Khurais facilities offers a pretext for war.

However, the United States and regional situation has changed, due to the 2020 U.S. elections, the strengthening of the Islamic Republic, and the growing European opposition to the conflict.

As journalist Elijah J. Magnier has stated, during the oil tanker crisis in the Persian Gulf last month U.S. President Donald Trump seemed no longer willing to challenge Iran directly, avoiding putting his country in the first line of confrontation for another year until the electoral results on November 2020. In the meantime, Washington is increasing sanctions on Iran.

“I don’t expect a surgical or limited strike [against Iran] because Iran will definitely retaliate and strongly to prove its defying readiness. The U.S. won’t go to war on behalf of Saudi Arabia and will not venture into a war that consequences are not guaranteed,” Magnier underscored in a tweet on Wednesday.

The U.S., Israel, and Saudi Arabia, has explained the journalist specialized in Middle East affairs, failed to achieve four main goals against the “Axis of Resistance” in the last decade: regime change in Syria, the partition of Iraq along sectarian lines, the defeat of the Houthis, and the Palestiniandeal of the century.”
 

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Iran: From the “Gulf’s Policeman” to the “Axis of Resistance”

Iran is currently facing the most widespread protest demonstrations since the contested presidential elections of 2009
Iran: From the “Gulf’s Policeman” to the “Axis of Resistance”Iran: From the “Gulf’s Policeman” to the “Axis of Resistance”

“It looks like this time the Israeli leadership [now immersed in a political deadlock after the disputed parliamentary elections on Tuesday] should explain to their citizens why a war with Iran is worth major destruction to its infrastructure and domestic casualties,” he wrote highlighting that the powerful Lebanese Hezbollah militia has vowed to attack Israel in case of war.

In spite of its strategic geoeconomic role, Saudi Arabia is losing relevance; the U.S. is less dependent than ever on its oil, thanks to the rise in shale oil production over the last ten years that catapulted the U.S. into the top spot for global oil output in 2018.

According to the Energy Information Administration, the U.S. produced 18% of the world’s oil last year, compared with Saudi Arabia’s 12%, Russia’s 11%, and Canada’s 5%.

As a result, the country is reaching “energy independenceproducing more oil than it imports; technological advancements in hydraulic fracturing (fracking) and deep-sea oil drilling have spurred the boom.

The U.S. imports less Saudi oil than it did in the past, yet this does not insulate it from price shocks on the global market because its economy is connected to the global market.

The price surge provoked by the drone attacks means Americans could soon pay more at the pump for gasoline, and that is bad news for Trump in electoral times.

Editing by Sofía Danis
More by Gabriel Moyssen

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