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The largest ever attack on Saudi Arabian oil facilities raises many questions

Author:

01.10.2019

The UAV attacks on the oil processing facilities of the Saudi national oil company Saudi Aramco near Abqaiq and Khurais raised many questions: who was the attacker? why the kingdom's missile defense systems were unable to defend such important facilities? what will be Riyadh's response? and how the attack affects oil prices in the short term? However, a detailed analysis of the situation shows that there are many other important questions not much visible.

On September 14, the two largest oil enterprises of Saudi Aramco were destroyed by ten cruise missiles and drones stuffed with explosives. None of these weapons were shot down. A large fire following the attack caused serious material damage and affected oil shipment. Shiite Houthi rebels from the Ansar Allah movement fighting the government forces in Yemen claimed responsibility for the attack. Riyadh has become involved in the conflict with Houthis after 2015, when it organised the invasion of the coalition forces of Arab states in Yemen to support the Sunni President of Yemen Mansur Hadi expelled earlier by Houthis. The coalition also set up a naval blockade to prevent weapons from falling into the hands of the rebels. The allies failed to deal with the Houthis effectively since the conflict ignited as a result of religious confrontation and complicated by the humanitarian crisis continues. In his interview to Al Masirah, Houthi spokesman Yahya Sari said that the attacks would continue until the Saudi government stopped attacks. By the way, it is not the first time that Shiite rebels use drones. In May, they damaged the East-West oil pipeline starting at Abqaiq. In August, a single drone attacked the Sheyba oil field. This list of 'achievements' goes on. But all these incidents are minor in comparison with the attack that took place in the middle of August 2019, provoking the Saudi oil production fall more than twice from 9.8 to 4.1 million barrels per day. In other words, the decline means 5% of global oil production. Bloomberg called it one of the biggest disruptions in history. Immediately after the attack the price of the Brent crude rose 13.8% becoming the biggest intraday price spike in 30 years. In an attempt to maintain the reputation of a reliable supplier, the Saudi authorities promised to do everything to prevent the significant decline of export flows.

Saudi Arabian Energy Minister Abdel Aziz bin Salman called the incident terrorist attacks. Since it is assumed that the Houthis enjoy the hidden military and financial support of Iran and its allies such as Hezbollah, Riyadh specifically accused Tehran. Official representative of the Saudi Ministry of Defense, Turki al-Maliki, demonstrated the debris of missiles used in the attacks on the oil facilities of the kingdom. He noted that, according to a preliminary investigation, "the attack was carried out using drones of Iranian origin and not from the territory of Yemen." Washington also accused the Iranian authorities of involvement in the attacks. The US Secretary of State Mike Pompeo said that "Tehran is behind about 100 attacks on Saudi Arabia." According to American media, the majority of President Trump's advisers support aggressive measures against Iran in response to attacks on the Saudi. However, President Trump decided not to listen to the advice of the Washington "hawks", making it clear that he was not going to use a military response, and even called his decision "a manifestation of force": "There's plenty of time to do some dastardly things... I did not say an ultimate option meaning war… I actually think it’s a sign of strength. The USA is the strongest military in the world. It's very easy to start... Let's see what happens. If something needs to be done, we will do it without hesitation.” Mr. Trump again resorted to the old tried and tested tool, the sanctions, noting that this time they will be "very significant".

Apparently, the controversial Iranian issue is constantly on the agenda of the American administration and causes serious confusion both in the working relations and in the heads of American politicians. A few weeks before the attack on Saudia Arabia, Western media reported that the American president was thinking about easing the sanctions against Iran in order to contribute to his meeting with Iranian President Hassan Rouhani at the end of September on the sidelines of the UN General Assembly. However, immediately after the incident, Trump declared that he had preconditions before he meets with the Iranian leadership. In a short period from Trump's alleged readiness to meet with Rouhani and shortly before the Saudi attacks on September 10, president's National Security Advisor John Bolton, who was categorically against any contacts with the Iranians, was fired from his post. At the same time, on September 20, Pompeo suddenly declared that Trump had assigned him a task to find allies and create a coalition that would work to resolve the situation peacefully. It is also known that the Secretary of Defense Mark Esper objected to a potentially costly conflict with Iran and recommended that Trump resort to a “restrained response.”

Meanwhile, Mike Pompeo also had to explain why Saudia Arabia, which is using American air defense systems and has a theoretically well defended airspace, became so vulnerable to drones. The Saudi Arabian air defense system includes American long-range and medium-range radars, medium-range radar systems Patriot and strategic long-range THAADs, which are also equipped with radars. In addition, three destroyers equipped with the Aegis missile defense system are on combat duty in the Persian Gulf off the Saudi coast. But if they remained silent on September 14th, it means that the whole “defense system” had a powerful malfunction and could not detect the drones. “Anti-aircraft systems are not always successful around the world. Even the best of them can fail to intercept the threat,” said Pompeo. But his answer seemed unconvincing to many and even puzzled. It means that the Secretary of State actually confirmed the inefficiency of American air defense system without even trying, for example, to blame everything on human factor to save both the image of the American air defense system and the image of the Saudi Arabia as a reliable supplier. It turns out that both are in doubt now. In fact, it means that there are huge unprotected territories in the Saudi kingdom, including such strategic area as the oil infrastructure in the Eastern provinces. All this caused a flurry of comments. But it is more important to predict the subsequent actions of the parties to the conflict.

In fact, the response depends only on the context of events. Those who expected the Americans to immediately respond to attacks on the Saudi oil infrastructure are mistaken, as they often try to boil down the geopolitical alignment of powers in the Middle East to simple components such as Shiites against Sunnis, Saudi Arabia against Iran, Russia against the US, all together against terrorists, etc. In fact, there have never been permanent allies or interests. On the contrary, it very often happens that two moves forward in one area can take one a few steps back in another area; in different situations a friend may turn out to be a rival, or the benefit turn to loss. For example, while the United States defeated Saddam Hussein and actually dismantled Iraq into various ethnic and religious groups, they also strengthened Iranian influence in the region. Another striking example is the existing relationship between the US and Turkey. Both Ankara and Washington are the members of the same military-political alliance, but dramatically diverge in their views on the role of the Kurdish factor in Syria. So, the existing situation around the drone attacks on Saudi Arabia can be viewed from different points of view.

As noted above, the attack of various objects with drones has nuances. Experts say that a manoeuvrable and low-altitude drone is a rather difficult target. The situation can be corrected only with the help of a radar aircraft, but for constant monitoring it must always be in the air. Even the Wikipedia reports that drones are available in Israel, Iran, Russia, Turkey, the US, and China, which also supplies them in huge numbers to the region. The war in Syria has become the most popular training ground for mastering the use of drones. In particular, the Russian media have repeatedly reported that UAVs were attacking the Russian Khmeimim air base. One of the most recent attacks occurred in early September when the jihadists flew several drones from Idlib. The previous equally large attack happened in May. At the same time, the Russian media claim that any such attacks are always successfully stopped outside the territory of the airbase. But a comparison of these messages with Pompeo's statements shows that Russian air defense is more effective than the American one? By the way, Putin has already offered Riyadh to buy Russian air defense systems to "feel secure." The visit of the Russian president to the Saudi Arabia and the UAE has been tentatively scheduled for mid-October. The agenda of the meeting is almost clear. It is not surprising that the Western media evaluates Putin's statements as yet another attempt to “troll” the military relations between the US and the Saudi Arabia, which are worth billions of contracts (Saudi Arabia is one of the top five countries by the volume of its military expenses).

But is the American missile defense system really so worse than the Russian one or is it easier to hide from the general public the things going on territory of a closed military facility than a burning oil terminal? We tend to believe that the use of drones in countless proxy wars has become a new reality, for which no one is fully prepared. In other words, for decades, the modern air defense systems have been trained to defend themselves against vultures, but it is the small bees that bite them now. Apparently, everyone suffers from drones, and everyone certainly knows perfectly well where they are coming from and who attacks them. So, is it possible to claim that the ongoing events are similar to putting no-go signs around the territory controlled by each of the conflicting parties? It seems the answer is yes because nobody really needs a big war. This also explains the divergence of views among American politicians on the military response to Iran and Trump's contradictory statements. The US president is also already exploring the possibility of sending additional military equipment to the Middle East, including missile defense systems, fighter jets and surveillance equipment, explaining this by "recent attacks on the oil sector of Saudi Arabia." It is difficult to come to a logical conclusion of this move but let's recall that in 2017 during his visit to the Middle East, Donald Trump agreed with the kingdom's leadership on the sale of weapons worth a total of $110 billion.

The economic side of the recent attack on Saudi Arabia is of particular interest. Thus, the increase in oil prices that occurred immediately after the attacks is beneficial not only to Iran, Russia, the US but, oddly enough, to Saudi Arabia also. On August 9, 2019, The Wall Street Journal published data that the largest oil company on the planet Saudi Aramco will conduct an IPO (first public sale of shares in a joint stock company) in early 2020. It is expected that Saudi Aramco will cost more than the most expensive companies in the world, such as Microsoft, Apple and Amazon. At the same time, The Financial Times estimated the company from $880 billion to $1.1 trillion, Bloomberg reports about $1 trillion, and Rystad Energy predicts $1.4 trillion. But this may turn to be a real deal if the oil prices are around $75 per barrel. Saudi Arabia takes the forthcoming procedure very seriously. They hope that Crown Prince Mohammed bin Salman will be right in his estimate of the company, which is twice higher than what Western experts predicted ($2 trillion). Western media report that in preparation for the IPO, the head of the board of directors of Saudi Aramco was replaced and the country's authorities are forcing some wealthy families of the country to become investors.

It is impossible to draw definite conclusions based on the above-mentioned statement, as there are few facts for such conclusions in a world where it is increasingly difficult to distinguish between allies and rivals, between war and peace. One can only try to explain some obvious contradictions and strange statements.



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