Middle East strains nerves of nations
Saturday, 4 August 2007
Roula Khalaf and Guy Dinmore
Two Saudi bombers in February tried to ram explosive-packed cars through the nerve centre of the kingdom's oil industry. One car blew up at the first gate of the Abqaiq oil facility, allowing the second vehicle to reach the next security layer, where it exploded under security forces' fire.
The militants had not accomplished their mission - to devastate parts of a plant that processes two-thirds of the kingdom's crude oil - but the assault sent tremors through oil markets, driving prices up by $2 a barrel. It also highlighted the vulnerability of the world's largest oil producer to the domestic terrorist threat.
That more than 60 per cent of the world's proved oil reserves are in the Middle East, a region wracked by conflict, is a constant source of anxiety for nations that rely on Gulf supplies. In spite of stated efforts to reduce its reliance on Middle East oil, the US has been driven to repeated interventions and support for autocratic regimes to ensure stable energy supplies.
The risk of terrorist attacks on oil facilities in the Gulf became more alarming after the attacks of September 11. More recently, however, the threat of a military conflict with Iran over its nuclear programme has intensified concerns over a possible disruption of oil exports.
Turki al-Faisal, Saudi Arabia's ambassador to the US, has warned that an attack against Iran would make "the whole Gulf an inferno of exploding fuel tanks and shot-up facilities" and "shoot up the price of oil astronomically".
With these threats in mind, the Bush administration has launched a new initiative to step up security co-operation with the Gulf, a plan that includes working on missile defence, maritime security, counter-terrorism, and intelligence co-operation. Classified studies that had gathered dust in the Pentagon are being re-examined as the US considers the feasibility of diverting and expanding the network of Arab pipelines to route the world's oil supplies away from the Gulf. While Iran is the "catalyst" for the upgraded security dialogue, the threat of internal terrorism is also a factor, says a US official.
Khalid al-Rodhan, a visiting fellow at Washington's Centre for Strategic and International Studies, says extremist groups have generally avoided attacks on the energy industry but the strategy changed with the postwar violence in Iraq, where pipelines and installations have been repeated targets. Since then, he says, al-Qaeda leaders, including Osama bin Laden, the network's chief, have called for attacks in Iraq and the broader Gulf. Ayman al-Zawahiri, Mr bin Laden's deputy, has told followers to focus assaults on the "Muslims' stolen oil, from which most of the revenues go to the enemies of Islam".
As they crack down on al-Qaeda cells in the kingdom, Saudi authorities have stepped up security around oil installations. According to Nawaf Obeid, a security analyst and government adviser, the internal security budget has soared to a projected $12bn (€9bn, £6.5bn) this year from $8.5bn in 2004, with the portion allocated to petroleum industry rising to $2bn from $1.2bn over the same period. More than 25,000 troops, meanwhile, are trained to protect oil facilities and are supported by air patrols.
Mr Rodhan, however, argues that there are no "bullet-proof" systems to protect energy facilities. If Saudi Arabia becomes more difficult to target, for example, al-Qaeda will shift to attacks on targets elsewhere in the Gulf. Terrorism remains the most likely danger to the safe flow of oil, but the threat of military conflict with Iran could be more serious. Regime insiders in Tehran claim Iran's most potent weapon is its perceived ability to cripple the Strait of Hormuz, which connects the Gulf with the Indian Ocean and from where more than a third of the world's exported oil passes.
Ayatollah Ali Khamenei, Iran's supreme leader, warned in early June that a US "mistake" would jeopardise oil flows from the Gulf. Two months earlier, Iran announced it had test-fired a new high-speed torpedo in what analysts saw as a direct threat to ships passing through the strait.
Experts, however, question Tehran's ability to provoke a lasting crisis in the strait if its nuclear facilities are attacked by the US, predicting that it might be capable of sinking one ship - but not more. "Iran is unlikely to sink two ships because retaliatory action would be taken," argues Christopher Langton, military analyst at London's International Institute for Strategic Studies. The US Navy's 5th Fleet in Bahrain has aircraft carriers, destroyers and other ships stationed in the region and Iran's naval forces would not withstand US air attacks. To reduce the risk of missiles hitting their oil facilities - another possible Iranian retaliation - Arab governments have been upgrading their ground based air defences and, in some cases, fighter aircraft. The US, meanwhile, has been looking again at options to bypass the Strait of Hormuz, though Gulf analysts say governments have little enthusiasm for reinvigorating pipeline plans, some of which date back to the 1980-1988 Iran-Iraq war.
Many of the pipelines that would be needed indeed exist already, but in some cases do not function. One is an Iraqi pipeline that feeds south from Basra, skirting Kuwait into Saudi Arabia. Its ownership has been in dispute since the Iraqi invasion of Kuwait in 1990. Construction of a spur from Kuwait could possibly feed into that pipeline, taking Kuwaiti oil south to the Red Sea through Saudi Arabia instead of to the Gulf. Security and politics permitting, Iraqi oil also moves through its northern pipelines to Turkey and Syria.
Existing pipelines across the Arabian peninsula could also be expanded to enhance the flow of Saudi oil west to the Red Sea. To the east, Oman, whose own oil resources are running out faster than its Gulf allies, is studying the possibility of transporting oil from Abu Dhabi across the United Arab Emirates direct to the Omani coast for refineries on the Arabian sea, avoiding the Strait of Hormuz.
The Pentagon is said to have carried out classified research into this transportation issue before the 2003 invasion of Iraq. Amy Myers Jaffe, associate director of Rice University's Energy Programme in Houston, recommends that in addition to the pipeline work the international community negotiate an international convention asserting the free flow of oil through the Strait of Hormuz, similar to the 1936 Montreux Convention guaranteeing freedom of navigation through the Turkish-controlled Dardanelles and Bosphorus. "In tandem these moves would be very powerful and ameliorate some of the oil issues related to a nuclear Iran," she says.
Two Saudi bombers in February tried to ram explosive-packed cars through the nerve centre of the kingdom's oil industry. One car blew up at the first gate of the Abqaiq oil facility, allowing the second vehicle to reach the next security layer, where it exploded under security forces' fire.
The militants had not accomplished their mission - to devastate parts of a plant that processes two-thirds of the kingdom's crude oil - but the assault sent tremors through oil markets, driving prices up by $2 a barrel. It also highlighted the vulnerability of the world's largest oil producer to the domestic terrorist threat.
That more than 60 per cent of the world's proved oil reserves are in the Middle East, a region wracked by conflict, is a constant source of anxiety for nations that rely on Gulf supplies. In spite of stated efforts to reduce its reliance on Middle East oil, the US has been driven to repeated interventions and support for autocratic regimes to ensure stable energy supplies.
The risk of terrorist attacks on oil facilities in the Gulf became more alarming after the attacks of September 11. More recently, however, the threat of a military conflict with Iran over its nuclear programme has intensified concerns over a possible disruption of oil exports.
Turki al-Faisal, Saudi Arabia's ambassador to the US, has warned that an attack against Iran would make "the whole Gulf an inferno of exploding fuel tanks and shot-up facilities" and "shoot up the price of oil astronomically".
With these threats in mind, the Bush administration has launched a new initiative to step up security co-operation with the Gulf, a plan that includes working on missile defence, maritime security, counter-terrorism, and intelligence co-operation. Classified studies that had gathered dust in the Pentagon are being re-examined as the US considers the feasibility of diverting and expanding the network of Arab pipelines to route the world's oil supplies away from the Gulf. While Iran is the "catalyst" for the upgraded security dialogue, the threat of internal terrorism is also a factor, says a US official.
Khalid al-Rodhan, a visiting fellow at Washington's Centre for Strategic and International Studies, says extremist groups have generally avoided attacks on the energy industry but the strategy changed with the postwar violence in Iraq, where pipelines and installations have been repeated targets. Since then, he says, al-Qaeda leaders, including Osama bin Laden, the network's chief, have called for attacks in Iraq and the broader Gulf. Ayman al-Zawahiri, Mr bin Laden's deputy, has told followers to focus assaults on the "Muslims' stolen oil, from which most of the revenues go to the enemies of Islam".
As they crack down on al-Qaeda cells in the kingdom, Saudi authorities have stepped up security around oil installations. According to Nawaf Obeid, a security analyst and government adviser, the internal security budget has soared to a projected $12bn (€9bn, £6.5bn) this year from $8.5bn in 2004, with the portion allocated to petroleum industry rising to $2bn from $1.2bn over the same period. More than 25,000 troops, meanwhile, are trained to protect oil facilities and are supported by air patrols.
Mr Rodhan, however, argues that there are no "bullet-proof" systems to protect energy facilities. If Saudi Arabia becomes more difficult to target, for example, al-Qaeda will shift to attacks on targets elsewhere in the Gulf. Terrorism remains the most likely danger to the safe flow of oil, but the threat of military conflict with Iran could be more serious. Regime insiders in Tehran claim Iran's most potent weapon is its perceived ability to cripple the Strait of Hormuz, which connects the Gulf with the Indian Ocean and from where more than a third of the world's exported oil passes.
Ayatollah Ali Khamenei, Iran's supreme leader, warned in early June that a US "mistake" would jeopardise oil flows from the Gulf. Two months earlier, Iran announced it had test-fired a new high-speed torpedo in what analysts saw as a direct threat to ships passing through the strait.
Experts, however, question Tehran's ability to provoke a lasting crisis in the strait if its nuclear facilities are attacked by the US, predicting that it might be capable of sinking one ship - but not more. "Iran is unlikely to sink two ships because retaliatory action would be taken," argues Christopher Langton, military analyst at London's International Institute for Strategic Studies. The US Navy's 5th Fleet in Bahrain has aircraft carriers, destroyers and other ships stationed in the region and Iran's naval forces would not withstand US air attacks. To reduce the risk of missiles hitting their oil facilities - another possible Iranian retaliation - Arab governments have been upgrading their ground based air defences and, in some cases, fighter aircraft. The US, meanwhile, has been looking again at options to bypass the Strait of Hormuz, though Gulf analysts say governments have little enthusiasm for reinvigorating pipeline plans, some of which date back to the 1980-1988 Iran-Iraq war.
Many of the pipelines that would be needed indeed exist already, but in some cases do not function. One is an Iraqi pipeline that feeds south from Basra, skirting Kuwait into Saudi Arabia. Its ownership has been in dispute since the Iraqi invasion of Kuwait in 1990. Construction of a spur from Kuwait could possibly feed into that pipeline, taking Kuwaiti oil south to the Red Sea through Saudi Arabia instead of to the Gulf. Security and politics permitting, Iraqi oil also moves through its northern pipelines to Turkey and Syria.
Existing pipelines across the Arabian peninsula could also be expanded to enhance the flow of Saudi oil west to the Red Sea. To the east, Oman, whose own oil resources are running out faster than its Gulf allies, is studying the possibility of transporting oil from Abu Dhabi across the United Arab Emirates direct to the Omani coast for refineries on the Arabian sea, avoiding the Strait of Hormuz.
The Pentagon is said to have carried out classified research into this transportation issue before the 2003 invasion of Iraq. Amy Myers Jaffe, associate director of Rice University's Energy Programme in Houston, recommends that in addition to the pipeline work the international community negotiate an international convention asserting the free flow of oil through the Strait of Hormuz, similar to the 1936 Montreux Convention guaranteeing freedom of navigation through the Turkish-controlled Dardanelles and Bosphorus. "In tandem these moves would be very powerful and ameliorate some of the oil issues related to a nuclear Iran," she says.