Iran seeks to prove it can disrupt oil and gas exports from Arab Gulf States

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A general view for the MV Andrea Victory under Norway flag which was attacked on 12 May 2019 outside Fujairah port, United Arab Emirates, 13 May 2019. [EPA-EFE/ALI HAIDER]

A recent attack on Saudi oil and shipping facilities west of Riyadh were designed to demonstrate Tehran’s ability to target all of the region’s oil and gas exports and raise exponentially the cost of military conflict for the US and its allies in the Gulf region, writes Hasan Alhasan.

Hasan Alhasan is a researcher at the India Institute at King’s College London and the National University of Singapore. Previously, he served as a senior analyst at the office of the first deputy prime minister of Bahrain. He contributed this op-ed for the Syndication Bureau, an opinion and analysis article syndication service that focuses exclusively on the Middle East.

Many observers have interpreted recent attacks on UAE and Saudi shipping and oil facilities as a result of yet another round of escalation in the US-Iran conflict, losing sight of the underlining message behind Iran’s orchestrated action.

The attacks have specifically targeted Saudi and UAE facilities that bypass the Strait of Hormuz, a narrow waterway traversed by one fifth of the world’s oil supply that Iran has threatened to close off in case of conflict. By attacking shipping and oil facilities, Iran is showing off its ability to disrupt the Gulf states’ contingency measures and to put the region’s entire export of oil and gas at risk.

Tensions between the US and Iran have risen sharply in recent weeks as the two sides have traded threats over Iran’s oil exports. In April, US Secretary of State Mike Pompeo announced that the US would end waivers on all purchases of Iranian oil effective May 1 as part of its “maximum pressure” campaign against Tehran. The Islamic Revolutionary Guard Corps, designated as a terrorist entity by the US last month, hit back, threatening to close off the Strait of Hormuz should Iran be banned from using it.

The face-off escalated sharply when, on May 5, US National Security Advisor John Bolton said the US was mobilising a carrier strike group and bomber task force to the Gulf in response to unspecified threats from Iran or its proxy groups to US interests. The move, he claimed, was intended as a “clear and unmistakable message to the Iranian regime.” The IRGC replied by describing the aircraft carrier, the USS Abraham Lincoln, as more of a target than a threat.

US deploying carrier, bombers to Middle East to deter Iran

The Trump administration is deploying a carrier strike group and bombers to the Middle East in response to troubling “indications and warnings” from Iran and to show the United States will retaliate with “unrelenting force” to any attack, national security adviser John Bolton said on Sunday (5 May).

On May 12, a series of explosions targeted four vessels near the UAE’s Fujairah Port in the Gulf of Oman. The explosions, which UAE authorities described as “sabotage,” damaged two Saudi, one Emirati and one Norwegian oil tanker but left the port intact. Two days later, Saudi Arabia announced that two of Aramco’s oil pumping stations situated to the west of Riyadh were the targets of a drone attack. The attack has since been claimed by the Iran-backed Houthis in Yemen.

So far, Saudi Arabia and the UAE have reacted with caution. The UAE foreign ministry called upon the “international community to assume its responsibilities,” eschewing any reference to the culprit’s identity. Meanwhile, Saudi Energy Minister Khalid Al Falih made an indirect reference to Iran by highlighting the need “to face terrorist entities, including the Houthi militias in Yemen that are backed by Iran.”

Although the UAE and Saudi Arabia have not yet pinned the blame on Iran, a team of US military investigators has reportedly concluded that Iran or its proxy groups were likely responsible for the attacks on the oil tankers near Fujairah. Moreover, the Houthis’ public claim of responsibility for the attack on the Aramco’s facilities is another indicator of Iranian involvement. Iran has nurtured a web of allies and proxy groups across the region that allow it to extend the reach of its operations while maintaining deniability.

If reports of Iranian involvement are accurate, it is likely that the attacks were designed to demonstrate Tehran’s ability to target all of the region’s oil and gas exports, including those that do not flow through the narrow waters of the Strait of Hormuz. The attacks suggest that Iran intends to make good on President Hassan Rouhani’s recent threat that “if one day they want to prevent the export of Iran’s oil, then no oil will be exported from the Persian Gulf.”

In response to Iran’s repeated threats of closing off the strait, the Gulf states had for years drawn up plans to bypass the narrow passageway. Such plans involve routing oil and trade supplied by land either to the Gulf of Oman via the UAE or across Saudi Arabia to the Red Sea. This month’s attacks may be meant to demonstrate Iran’s ability to counter such contingency measures, and thereby to put the region’s entire oil export at risk.

The peculiar nature of the Houthi drone attack on Aramco’s pumping stations seems to support this view. In the past, the Houthis’ use of drones and missiles on Saudi or Emirati territory seemed intended to maximise the psychological effect on civilian populations. Although the Houthis have targeted Saudi oil assets in the past, attacks usually have been to Aramco facilities close to the Yemeni border in Asir or Jizan, or aimed at Saudi oil tankers at sea.

By contrast, the most recent attack targeted pumping stations located in sparsely populated regions west of Riyadh, indicating that the intended effect was not to spur civilian terror. Rather, these stations are important precisely because they help transport oil from Saudi Arabia’s fields in the east to the port of Yanbu in the Red Sea, thereby allowing the oil to bypass the Strait of Hormuz completely.

Similarly, the UAE’s Fujairah Port derives its strategic importance from its location. Situated just south of the Strait of Hormuz, the port could also allow the UAE to bypass an Iranian attempt to block oil exports traveling through the strait in case of military conflict. The Fujairah oil terminal, which in 2012 boasted a capacity of just under 2 million barrels per day, already receives oil from the Habshan fields in Abu Dhabi.

For Iran, the strategic rationale behind the attacks is to raise exponentially the cost of military conflict for the US and its allies in the Gulf region. Like Iran, Arab Gulf states rely overwhelmingly on the export of oil and gas for income. Interrupting the region’s oil and gas exports would also cause global energy prices to skyrocket, dealing damage to the US economy that relies on cheap energy.

Finally, although leaders in both the US and Iran insist that they do not want war, their actions ultimately speak louder than their words. Through a reckless display of brinksmanship, the two sides have set themselves on a perilous yet avoidable path of escalation whose consequences could spell disaster for all those involved.

Iran and the US are inching toward war

There can be little doubt now that Iran and the US are inching toward full-scale war. All attempts by either to force a change in the other’s behavior have come to nothing. Conflict now seems inevitable, writes Dnyanesh Kamat.

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