Drone Attacks on Saudi Oil Infrastructure are a Calibrated Message from Iran © 2019 IAI by Micha’el Tanchum The 14 May 2019 drone attack on two Saudi Ministry of Energy,1 resulting oil pumping stations in Saudi Arabia, in a temporary and precautionary ISSN 2532-6570 allegedly carried out by Iranian- shutdown of the pipeline for evaluation. supported Houthi forces in Yemen, On the day of the drone attacks, a was a sophisticated operation. Coming television station operated by Houthi at a time of increased tensions in the forces in Yemen reportedly claimed the region, and notwithstanding Iranian rebels had conducted drone attacks on denials, the attack represents a carefully Saudi installations, without specifying calibrated response to the tightening the exact time or targets of the attacks.2 of oil sanctions against Iran and the US Trump administration’s policy of In prior attacks on Saudi Arabia, Houthi “maximum pressure” on Tehran. rebels have used Qasef-1 drones, copies of Iran’s Ababil-2 drone that The attacks were preceded three days are allegedly produced in Iran despite earlier by acts of sabotage against ships Houthi claims of local production.3 in the United Arab Emirates (UAE) oil The Qasef-1 was used to conduct the port of Fujairah. Taken together, these attacks against oil export infrastructure 1 “Saudi Energy Minister Says Two Pump of the leading Gulf state members of Stations on the East-West Pipeline Were the anti-Iran bloc are a signal that the Attacked, Confirming Sabotage Targets Global collective ability of Saudi Arabia, the Oil Supply”, in Saudi Press Agency, 14 May 2019, https://www.spa.gov.sa/1923830. UAE and other Gulf countries to replace 2 “Saudi Arabia Says Oil Stations Attacked by Iranian oil is not assured. Armed Drones”, in Al Jazeera, 14 May 2019, https://aje.io/22z6c. The attack in Saudi Arabia caused 3 Shaul Shay, The Houthi Drone Threat in Yemen, minor damage to only one of the Herzliya, International Institute for Counter- Terrorism, February 2019, https://www.ict.org. pumping stations, according to the il/Article/2331/. Micha’el Tanchum is a Fellow at the Hebrew University’s Truman Research Institute for the Advancement of Peace and non-resident, affiliated scholar with the Başkent University IAI COMMENTARIES 19 | 35 - MAY 2019 19 | 35 - MAY IAI COMMENTARIES Strategic Studies Implementation and Research Centre in Ankara (Başkent-SAM). 1 Drone Attacks on Saudi Oil Infrastructure are a Calibrated Message from Iran May 2018 attack on Saudi Arabia’s Abha Located some 300 km northwest of International Airport.4 The one runway Jeddah, the Yanbu port is a major airport services flights to Egypt and oil terminal for the kingdom. The Saudi Arabia’s Gulf neighbours and is maximum capacity of the pipeline is located approximately 100 km from roughly 5 million barrels per day (bpd) the Saudi–Yemen border. The two and is being expanded to 6.5 million pumping stations hit almost exactly a bpd. Currently, Saudi oil exports are year later are located over 700 km from hovering just under 7 million bpd,6 so © 2019 IAI Saudi’s border with Yemen. the expanded Petroline pipeline could theoretically be used to continue Saudi This most recent attack therefore Arabia’s global exports in the event of a represents a considerable upgrade in disruption in the Persian Gulf and the the sophistication of the Houthi’s drone strategic passageway of the Strait of capabilities, suggesting the use of the Hormuz. 1,400 km range UAV-X drone reported to be in their possession.5 The UAE’s Fuajirah port performs a similar function in providing security ISSN 2532-6570 In contrast to large oil storage tanks, of export supply routes in the event of the pumping stations that were conflict in the Persian Gulf. It too was attacked are relatively small targets. targeted through acts of sabotage on More difficult to hit, especially over Saudi and Emirati vessels anchored such long distances, and not inflicting off port.7 Fujairah is the world’s second spectacular damage for the effort, the largest bunkering (ship refuelling) port deliberate targeting of the pumping and a major oil storage centre, with the stations that supply the Saudi Petroline UAE seeking to more than double its pipeline was specifically tailored to already large storage capacity by 2022.8 threaten the kingdom’s export outlets without providing a pretext for a major Strategically located on the UAE’s escalation. eastern coast on the Gulf of Oman, outside the Persian Gulf and its Strait of Petroline, also known as the East-West Hormuz choke point, the Fujairah port pipeline, transports oil from Saudi provides another critical export outlet. Arabia’s oil-producing Eastern province The Abu Dhabi Crude Oil Pipeline on the Persian Gulf westward a distance (ADCOP) runs from the UAE’s Habshan of 1,400 km to the oil refineries at Yanbu on Saudi Arabia’s Red Sea coast (see 6 Rania El Gamal, “Saudi Arabia to Cut Oil Figure 1). Exports in April: Saudi Official”, in Reuters, 11 March 2019, https://reut.rs/2F2Bvhf. 4 “Saudi Foils Houthi Drone Attack Bid on Abha 7 Nic Robertson, “Questions Swirl Over Airport”, in Khaleej Times, 27 May 2018, https:// ‘Sabotage Attack’ As Iran Tensions Ratchet Up”, www.khaleejtimes.com/region/saudi-arabia/ in CNN, 15 May 2019, https://cnn.it/2Q33Dow. Saudi-foils-drone-attack-bid-on-Abha-airport-. 8 James Leech, “Interview: Fujairah Port Expects 5 Dion Nissenbaum and Warren P. Strobel, “Mideast Crude Storage to More Than Double by 2022”, Insurgents Enter the Age of Drone Warfare”, in in S&P Global Platts, 16 April 2019, https://www. The Wall Street Journal, 2 May 2019, https://www. spglobal.com/platts/en/market-insights/latest- wsj.com/articles/mideast-insurgents-enter-the- news/oil/041619-interview-fujairah-port-expects- age-of-drone-warfare-11556814441. crude-storage-to-more-than-double-by-2022. IAI COMMENTARIES 19 | 35 - MAY 2019 19 | 35 - MAY IAI COMMENTARIES 2 Drone Attacks on Saudi Oil Infrastructure are a Calibrated Message from Iran Figure 1 | Major oil and natural gas infrastructure in Saudi Arabia © 2019 IAI ISSN 2532-6570 Source: “Saudi Arabia’s Oil and Gas Infrastructure”, in Geopolitical Futures, 9 February 2016, https:// geopoliticalfutures.com/?p=672. oil field to Fujairah where it supplies the The attacks, therefore, are a message refinery as well as the export terminal. for Riyadh, Abu Dhabi and Washington as the US escalates its crippling The spare production capacity of Saudi economic pressure on Iran, particularly Arabia, the UAE and Kuwait are crucial in the wake of the US ending sanctions for the success of US’s confrontational waivers in early May 2019 for Iran’s policy towards Iran, including most largest purchasers of oil.9 Iran’s significantly the stringent oil sanctions. economy had already contracted by 3.9 This spare capacity can, and has in the per cent in 2018 and was forecasted to past, been used to keep global oil prices shrink by another 6 per cent in 2019 stable despite the removal of Iranian oil prior to the announced end of waivers. from the market. However, oil produced With general inflation over 50 per cent by these nations is of no use if it cannot and rising, and the inflation rate on be securely exported. Saudi Arabia’s Petroline pipeline and the UAE’s ADCOP pipeline and Fujairah port are 9 critical back-up supply routes should a “US to End Sanctions Waivers for Iranian Oil Imports”, in Deutsche Welle, 22 April 2019, conflict break out in the Persian Gulf. https://p.dw.com/p/3HEDV. IAI COMMENTARIES 19 | 35 - MAY 2019 19 | 35 - MAY IAI COMMENTARIES 3 Drone Attacks on Saudi Oil Infrastructure are a Calibrated Message from Iran food at 85 per cent and rising,10 Iran’s While the circumstances surrounding economy is on the verge of entering a the Fujairah attacks remain murky, death spiral. Iranian-backed Houthis in Yemen were clearly involved in the attack on Saudi The desperate situation was made Arabia’s Petroline pipeline. It is unlikely worse by Washington’s announcement, that Iranian-supplied Houthi forces on 8 May 2019, that it would impose would conduct such an attack without sanctions on Iran’s metals industry. at least tacit permission from Iran’s © 2019 IAI Primarily iron, steel, aluminium and Revolutionary Guards Quds force. copper, these metal exports constitute Iran’s largest revenue source outside its Ninety per cent of Iran’s oil is exported hydrocarbon-related exports, providing from its Kharg Island terminal located 10 per cent of Iran’s export revenue,11 25 km off Iran’s Persian Gulf coast and are also a major employment sector and 483 km northwest of the Strait of in the country. Hormuz. Saudi Arabia and the UAE’s dependency on the Persian Gulf for their For its part, Tehran has denied that it own oil exports traditionally created a ISSN 2532-6570 was involved in either set of attacks, degree of mutual deterrence against maintaining plausible deniability. any party disrupting the security of Describing the sabotage at Fujairah the shared maritime domain. The as “alarming and regrettable”,12 Iran’s creation of Persian Gulf bypass routes foreign ministry spokesperson warned by Saudi Arabia and the UAE, however, of the intervention of foreign forces has removed that mutual deterrence in the Gulf and called for further and created a severely asymmetrical clarification of what occurred.13 vulnerability for Iran’s maritime oil exports. The incidents at Fujairah are currently being investigated by the UAE with By striking at oil export infrastructure assistance from Saudi Arabia, the that bypasses the Persian Gulf without US, Norway14 and possibly France.