On Saudi/Iran crisis

On Saturday, September 14, 2019, missiles alleged to be from Iran struck oil installations at two of the Kingdom of Saudi Arabia’s most important sites, causing global oil prices to spike. The Saudi Interior Ministry reported fires at the two processing centers, in Abqaiq and also in Khurais, before dawn, and later said they had […]

On Saturday, September 14, 2019, missiles alleged to be from Iran struck oil installations at two of the Kingdom of Saudi Arabia’s most important sites, causing global oil prices to spike.

The Saudi Interior Ministry reported fires at the two processing centers, in Abqaiq and also in Khurais, before dawn, and later said they had been attacked with drones. The ministry said both fires had been “controlled and contained”.

President Trump condemned the attack in a phone call with Saudi Crown Prince Mohammed bin Salman and offered support for “Saudi Arabia’s self defense,” the White House said in a statement, adding that the United States “remains committed to ensuring global oil markets are stable and well supplied.”

U.S. Secretary of State Mike Pompeo described the attack as an “act of war”. The strike on one of the oil installations, in Abqaiq, was particularly worrying because it processes crude from several key Saudi oil fields, and many believe that Abqaiq is by far the most important oil facility in the world.

A Houthi spokesman, Brig. Gen. Yahya Sare’e, said that the group’s forces “carried out a massive offensive operation of 10 drones targeting Abqaiq and Khurais refineries.”

And just recently, Iran President Hassan Rouhani urged Western powers to “distance” themselves from the Persian Gulf, calling the ongoing presence of the United States and other military forces in the region a “calamity.”

Though the Trump administration has rebuked all Iranian denials that the country was behind the attack, Rouhani declared Iran was ready to make peace with their Middle East neighbors but joined several other Iranian leaders in asking the U.S. and other Western countries to leave the region altogether.

The attack adds a new layer of volatility to the Middle East. It damaged vital economic infrastructure, and can also increase tension, security costs, and disrupt markets.

Both US and Saudi Arabia put blame on Tehran, and, of course, the attack brings to the fore the broader struggle between the United States and Iran, and  the decades-old U.S. commitment to do whatever it takes to ensure that oil flows freely out of the Persian Gulf.

The United States embraced the mission of protecting Gulf energy supplies in 1980, when President Jimmy Carter announced his doctrine declaring that the United States would protect the Persian Gulf region and its huge reservoirs of oil from outside interference, with military action, if necessary.

The US imported about two million barrels a day of Persian Gulf oil in 1980, and the country was even more dependent on Persian Gulf oil in the aftermath of 9/11.

Today, the United States currently imports less than one million barrels of oil a day from the region. Such energy independence may deter Trump from further attempt to protect the oil flows of the Persian Gulf.

Thus, protecting the Persian Gulf oil-flow should be a collective effort, involving every nation that relies on oil from the region.

China, the world’s biggest oil importer, is the biggest Asian consumer of Persian Gulf oil, getting about 40 percent of its crude from the region. But does it have the political will to protect the oil in the region?

That remains to be seen, but there is the urgent need to ensure that Persian Gulf oil gets to the market in order to keep oil prices stable and help shore up the global economy.

We urge for a peaceful resolution of this crisis. The United States should avoid military action with the Middle East.