Fujairah port in the United Arab Emirates, March 18, 2010 (photo by Michael Gaylard/Flickr).
The
latest attacks on the Arab Gulf oil industry seem to be part of a strategy by
Iran to warn the Gulf states that it can block all oil shipments, if it sees
fit.
One
of the warnings was the attack on three tankers at anchor off Fujairah in the
Gulf of Oman. Indeed, Fujairah is used by shippers to keep their empty ships
within twenty-four hours of the loading harbors within the Gulf. Upon receipt
of notification from Saudi Aramco, the Kuwait Petroleum Corporation (KPC), or the
Abu Dhabi National Oil Company (ADNOC), the oil buyers have, by contract, twenty-four
hours to go pick up the shipment. To make sure they keep this deadline and
keep their tankers out of the Gulf, in case of sudden conflict, the shipping
firms place their ships at anchor a few kilometers from Fujairah. They can sail
off within minutes to go off around the Straits of Hormuz and reach Ras Tannura
or other Gulf loading areas within the twenty-four hours required. Now, of
course, shipping companies cannot be sure that their fleets are safe while
waiting out of the Gulf, which will increase costs considerably.
The
Iranian message is that they can get to the Saudis’ and other Gulf states’
shipping ability beyond the Straits of Hormuz. Their attack on the East-West
Pipeline, which can ship 5 million barrels per day (b/d) to Yanbu on the Red
Sea carried the same threat. This weekend’s drone/missile attack on Abqaiq
reinforces the message to Saudi Arabia that Iran can destroy or at least
severely curtail all exports, even without mining the Straits of Hormuz or
attacking ships through Houthi proxies in the Straits of Bab El Mandeb.
At this point, either the Saudis fold or fight back. However, they can only fight back if the United States provides a backbone of military support. Iran is well aware of the nature of leadership in the United States and Saudi Arabia and is counting on the two nations folding. Of course, this would be a dangerous course for Iran, as the United States and Saudi Arabia might instead retaliate.
Jean-Francois Seznec is a senior fellow with the Atlantic Council Global Energy Center.
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Atlantic Council experts react to the September 14 attacks on Saudi oil facilities and what it means for global energy markets and the wider region.
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David A. Wemer
The latest attacks on the Arab Gulf oil industry seem to be part of a strategy by Iran to warn the Gulf states that it can block all oil shipments, if it sees fit. One of the warnings was the attack on three tankers at anchor off Fujairah in the Gulf of Oman.
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