Major Saudi Arabian oil facilities of Abqaiq (Buqayq) and Khurais, east of capital Riyadh, were attacked last Saturday, September 14. The attack could be considered the most devastating in modern history affecting not just Saudi Arabia but also the global economy. Abqaiq, operated by the Saudi oil giant ARAMCO, is the largest oil processing facility in the world. It is reported to process about 7 million barrels of oil per day.
The immediate result of the attack resulted in slashing down of Saudi oil production down to 50%. This is equivalent to 5% of the global production of crude oil. Oil prices had already jumped to almost $65 per barrel and is expected to hover around $73 per barrel early 2020 assuming no new attacks against other oil facilities would take place.
To minimize the effect of such high prices within Saudi Arabia itself, Al-Saud ruling family, who owns ARAMCO, has shut off the 350 thousand barrel per day oil pipeline to Bahrain, and released its oil reserve to compensate for the loss. Unfortunately, the Saudi reserve may last only 37 days less than the amount of time that may take for experts to evaluate the damage, not mentioning the length of time to clean up the facilities, order new equipment and material, and rebuild the facilities. This may take a year of non-stop extensive labor if not any longer.
The extent of the damage is far worse than what Saudi Arabia would confess. The long-lasting repercussions on Saudi Arabia and on the world market will unfold gradually with time. We already are seeing one major effect namely that Saudi Arabia has been turned from an oil-producing to an oil-consuming country. On Thursday 19th, Saudi Arabian ARAMCO had asked Iraq’s State Oil Marketing Organization (SOMO) for some 10 million barrels of Basra Light, to load in October and November to compensate for Saudi’s loss of oil production. This is also reported and confirmed by Wall Street Journal.
The Saudi Dammam Marine Traffic office reported that there are at least 11 giant oil tankers docked at the port not knowing when they will be loaded with crude oil. It is also expected to receive fewer oil tankers than usual to dock at Saudi ports in the next few months. Oil tankers will be directed to other oil-producing countries. Such uncertainty will increase the cost of doing business and of insurance premiums for the tankers.
This particular attack caused the Saudi Exchange Market to plummet 5%, and will definitely push foreign investors to withdraw from Saudi economy due to lack of adequate security, and due to threats of possible further attacks that might directly hit their investments. Saudi Arabia could witness a repeat of the 2018 investors’ withdrawal worth of approximately $80 billion when investors such as JPMorgan, Blackstone, Ford, Standard Charter and Credit Suisse among others did not participate in the Davos in the Desert Conference, also known as the Future Investment Initiative, which put MBS’ dream project; NEOM, on indefinite hold. Those withdrawals increased the Saudi 2018 budget deficit to $35 billion. Spending billions on weapons purchase to continue the war on Yemen had also contributed greatly to the deficit.
The attack had come in a crucial time; a few weeks before Saudi’s plan to offer 5% of ARAMCO’s stocks to the market. The value of the stocks has been greatly reduced causing a huge loss to the royal family, who owns the company.
This attack came as an expected consequence of the war against Yemen. Saudi Arabia and UAE had formed what was called Saudi Alliance to restore the Saudi puppet Abdrabbuh Mansur Hadi back to power in Yemen. A Houthi led revolution deposed Hadi, who fled to Saudi Arabia. The Saudi Alliance forces consist mainly of Sudanese and Ethiopian mercenaries led by some Saudi and Emirati military officials supervised, directed and armed by American, British, French and Israeli military and intelligence officers.
Let us be clear about the war on Yemen. It is a genocidal imperialist war incited by the Western power…
Let us be clear about the war on Yemen. It is a genocidal imperialist war incited by the Western power to gain control over the strategic Bab el-Mandab Straight controlling the southern entrance to the Red Sea, to control the strategic Socatra Island in the Gulf of Aden, and the oil and the rich mineral resources in the Yemeni mountains.
Contrary to the expectations that the war against Yemen would take only few months to accomplish its goals, it is now in its fifth year and is still going strong and with opposite than the expected results. It has been a genocidal devastating war with the Americans fueling and navigating fighter planes bombing every Yemini city, all infrastructures, governmental and civilian institutions including schools, hospitals, markets, factories, farms and even wedding and funeral processions. This genocidal war included soliciting Israel’s help to drop two nuclear bombs on Sana’a in May 2015. It also included an economic blockade killing civilians through starvation and preventable diseases.
Having the legitimate right of self-defense the Houthis stood up against Saudi aggression. Born in the country, used to its harsh climate, familiar with its rugged mountains, and defending country and families they started by rebelling and inflicting heavy casualties on the Saudi mercenaries, who are not familiar with the harsh terrain of Yemeni mountains. Then they manufactured and improved ballistic missiles and explosive-laden drones; long-range precision targeting controlled flying bombs.
Unlike Saudi fighter planes that bombed Yemeni civilian targets, Houthis bombed Saudi military targets; airports for military fighters and military bases. Lately, they started bombing Saudi monarchy owned ARAMCO targets to affect heavy cost on the kingdom.
On May 14 of this year, the Houthis sent 10 drones to attack oil pumping stations west of the Saudi capital Riyadh, at Dawadmi and Afeef, disrupting the flow of oil through a 1,200 kilometer pipeline that carried crude oil from Saudi Arabia’s main eastern oil fields to the Red Sea port city of Yanbu in the West. This vital pipeline has a capacity of at least five million barrels per day.
On August 17th the Houthis again used ballistic missiles and drones targeting the Shaybah oil field near the border with the UAE, as well as the Dammam exporting complex in Saudi Arabia’s Eastern Province. Shaybah oil field produces about one million barrels of crude oil a day.
These two particular attacks demonstrated the long-range reach of the Houthis’ drone program. The Houthis had demonstrated that a new rule of military engagement has been achieved. Saudi Arabia can no longer bomb Yemeni targets with impudence and without any retaliatory action. The Houthis now can retaliate by sending their drones to bomb any target deep in the Saudi kingdom including its capital Riyadh.
Yet, instead of learning the lesson and continue peace negotiations with the Houthis, the Saudis, on September 7th, sent their fighter planes to the Yemeni city of Dhamar to bomb what they claimed to be a drone manufacturing facility. Unfortunately, the Saudis relied on faulty intelligence, and instead, they bombed a prison holding their own mercenaries, who were waiting for a prisoners exchange deal.
…with the ability to manufacture 6 such drones per day the Houthis are warning that more devastating attacks would target deep in Saudi territories if Saudi Arabia does not cease its aggression.
The Houthis’ devastating response came one week later, on Saturday, September 14th, when ten of their drones struck ARAMCOs’ oil facilities of Abqaiq and Khurais 12,000 kilometers deep on the eastern side of Saudi Arabia. Yahia Sarie; the military spokesman for the Houthis announced in a televised broadcast that the Houthis, with the help of on the ground intelligence from local operatives, were able to target the oil facilities with ten drones in pinpoint accuracy. He also explained that with the ability to manufacture 6 such drones per day the Houthis are warning that more devastating attacks would target deep in Saudi territories if Saudi Arabia does not cease its aggression. He also warned UAE that it could face similar attacks if it does not withdraw its mercenaries.
Having encouraged and benefited from arms sale to Saudi Arabia to perpetuate such war crimes these leaders have no right at all to condemn the legitimate Yemeni’s right of self-defense.
I was not surprised to see some Arab leaders, as well as European and American leaders, who stood watching the Saudi war crimes against Yemen during the last five years with their mouths shut without any criticism or condemnation, suddenly wake up and condemn the attack on the oil facility calling it a terrorist attack. Their conscience, if they have any, responds only to personal financial rather than to humanitarian loss. Having encouraged and benefited from arms sale to Saudi Arabia to perpetuate such war crimes these leaders have no right at all to condemn the legitimate Yemeni’s right of self-defense.
What surprised me instead, is their pathetic perspective of the Yemenis as undeveloped non-industrial and non-innovative people denying them the intelligence and the ability to manufacture their own defensive weapons. They claimed that drone technology and manufacture is beyond Yemeni intellectual capability. We did not hear such claim after the two drone attacks against ARAMCO facilities at Dawadmi and Shaybah, instead, the Saudi kept justifying their further extensive air raid as their willingness to destroy drone factories.
It might help to remember that many Yemeni military engineers had in the past been militarily trained and university graduates of the old Soviet Union, of today’s Russia, of North Korea, of East Germany and other eastern European countries. It takes only one scientist to teach others how to manufacture missiles and drones. Teenagers of today are learning how to build drones from the internet.
On Wednesday, September 18th, during a Saudi press conference the recently assigned energy minister Prince Abdulaziz bin Salman downplayed the extent of the damage to the oil facilities claiming that the facilities will be back in full production by the end of the month. This total nonsense aimed at providing a false sense of security in an attempt to maintain the price of crude oil as is. If you have watched the internet videos of the oil-blazed Abqaiq facility covering the sky with black smoke you would have an idea how devastated the attack was.
During the same press conference the Saudi defense ministry spokesman Lt. Col. Turki al-Malki accused Iran of the attack alleging that Iran had used very sophisticated missiles; way beyond the capability of the Houthis, to strike the oil facilities. Al-Malki claimed that Iranian made twenty-five delta-wing drones and missiles, used in the attack, came from north to south direction. Iran is north of Saudi Arabia while Yemen is on the south. He showed what he claimed as broken parts and unexploded missile collected from the site as proof that they were Iranian made. One should notice that these alleged parts were not charred by the huge blaze of the site, which cast serious doubts over this claim.
The absurd claim that the drones and missiles are allegedly Iranian made alludes that the attack was Iranian. Using the same logic we could conclude that the US has been attacking Yemen because Saudi Arabia had used American weapons to bomb Yemen.
The other absurd claim that the drones came from the north while the Patriot system is directed to the south is supposed to explain the failure of the system to detect the drones. It is known that radars work on a 360 degree fashion to detect any incoming flying object. If the radar was able to detect the drones; no matter which direction they came from, it would be easy to re-direct the Patriot missile system towards that direction unless they did not have Patriots protecting the facilities.
The American initial response to the attack was Trump’s emphatic claim that the US is “locked and loaded”; ready to punish the culprits. He tweeted on Sunday: “Saudi Arabia oil supply was attacked. There is reason to believe that we know the culprit, are locked and loaded depending on verification, but are waiting to hear from the Kingdom as to who they believe was the cause of this attack, and under what terms we would proceed!”
The CIA trained to lie and habitual lying Secretary of State Mike Pompeo hastened to repeat the American mantra of “Iran did it” even before the dust had settled in the Saudi oil facilities, before any examination or investigation of the facilities, and without any tangible proof or evidence. The US is ashamed to confess that its prized Patriot missile defense system and its very sophisticated satellites have miserably failed to detect the “rudimentary” cheap Houthi drones that flew 12,000 kilometers in Saudi territory without being detected. Such scandalous failure is bad business for the American military-industrial complex and needs to be concealed, otherwise other countries would resort to buying the Russian S-300/S-400 system as Putin had suggested to Saudi Arabia similar to what India and Turkey had done.
Iran had denied its responsibility of the attack, yet supported Yemenis’ right for self-defense. Iran does not benefit from attacking Saudi Arabia. Iranian officials had many times called on Saudi royal family to join Iran in a local alliance to safeguard the security of the Persian Gulf. The Iranians have the power and the courage to claim any military action they may take as we had seen when they shot down the American Global Hawk spy drone last June.
Besides the accusations of the habitually lying Pompeo and the American fake news media hinting about Iranian responsibility, no American military or political officials had directly blamed Iran. European and Asian leaders as well had also stated that there was no proof that Iran bombed the oil facilities. They all claimed that the origin of the drones is still unknown although the Houthis had claimed responsibility.
Trump had downplayed the effects of the attack on American consumer falsely claiming that the US is producing enough of its own oil, and it does not need Saudi oil. He authorizing the release of oil from the Strategic Petroleum Reserve as needed. According to reports by the US Energy Information Administration (EIA) the US oil production in 2018 was about 17.71 million barrel per day, while its consumption was about 20.5 million barrel per day.
To reduce the expected economic effects of the attack on the American economy the Federal Reserve chairman; Jerome Powell, announced on Wednesday 18th that due to expected economic continuous expansion on a moderate rate the Fed will lower the interest rate down to between 1.75% – 2%. This is the second time this year the Fed had reduced the interest rate.
Trump is an arms salesman. He just wants to keep milking his Saudi and Emirati cows further.
Trump admitted that the US has been selling weapons to Saudi Arabia, but the US has no defense treaty with the country, thus the US is not obliged to come to its defense. Trump has no interest in going to war against Iran on behalf of Saudi Arabia. Let us remember that he refrained from responding to Iranian downing of the American drone. Trump is an arms salesman. He explained that if Saudi Arabia needs protection it has to pay for it; buying more American weapons. And paying in billions, Saudi Arabia has been doing for the last five years but did not get the anticipated protection.
Trump does not want to take the US to war as he stated. He just wants to keep milking his Saudi and Emirati cows further. So he sent his Secretary of State Pompeo to Saudi Arabia and to UAE to discuss how buying more weapons would improve the security of their kingdoms. At the same time, as a face saving, he instructed his Secretary of Treasury; Mnuchin, to “substantially increase” the ineffective sanctions against Iran.
The so-called Saudi Alliance, and in fact the whole world, should not ignore the Houthis’ military capabilities and resolve to inflict a definite more devastating attacks deep in the Saudi territory that will affect the whole world, and should take this attack as a serious warning message to stop the war on Yemen.