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Drone Strike in Saudi Arabia Potentially Broadens Perception of Iranian Threat
Over the course of the Trump Presidency, there has been one crucial variable missing in its justification for escalation with Iran: a direct linkage of Iran to the security of the international community. Recently however, an attack on oil facilities in Saudi Arabia may have provided this link. In the immediate hours after the event’s unfolding, several of the event’s main-players — namely Saudi Arabia, the Trump Administration, and the Houthis — have been using this high-level threat to the global economy to maximize the benefits of their given political objectives. Thus, the actual details of where the attack originated have become secondary to the ways in which various actors have employed their narratives to justify their own ends.
On September 14th, 2019 we woke up to the news of a drone attack on Saudi Arabia’s oil facilities. While the source of the attack is disputed, the Houthis are the only group to explicitly claim responsibility.[1] However, Saudi Arabia has disputed this claim, denying that the attack originated from Yemen.[2] One element is clear: regardless of the actual source of the attack, Saudi and American leaders have begun using this event to resonate with their larger narrative of countering Iran. Conversely, the Houthis have been using the attack arguably to project more power, perhaps to increase their leverage in anticipation of future negotiations.
While the drone attacks indeed have had tangible drawbacks such as damage to infrastructure and a temporary cut in oil output, not to mention potential deterrent to foreign direct investment (FDI), there are also political benefits that serve the objectives of Saudi Arabia and President Trump’s administration. One issue that stands out that is beneficial to Saudi Arabia and the Trump administration is that Iran can now be depicted as a security threat to a previously skeptical international community. Prior to Saturday’s attack, Saudi leaders and the Trump Administration had difficulty convincing international powers that Iran is indeed a threat to their security. While this argument will still certainly have its detractors, much to the Administration’s and KSA’s delight, resultant fluctuations in the international energy markets now can arguably depict Iran as being a direct threat to the global economy.
Historically, trends show that once there is a risk for oil production, there is a premium on oil prices. Studies have shown from January 1998 to September 2014 that political risks alone have contributed to 17.58% oil price fluctuations. [3] As most recently witnessed, oil prices increased by 19%, marking the biggest intraday increases since the 1991 Gulf War.[4] This consisted of a 6% drop in global output and saw Saudi Arabia scrambling to restore its lost output of 5.7 million barrels per day.[5] The question remains: How long will these shocks last? The supply side of the markets can sufficiently cover the losses and therefore, the costlier long-term demand shocks will likely be avoided. Unless there are additional attacks, this increase in price can soon be expected to stabilize. However, from the perspective of Saudi Arabia and the Trump administration, the more beneficial aspect of this attack is the political capital gained from the increased potential to isolate Iran. These price fluctuations can indeed temporarily affect oil-consuming nations. Although temporary, these minor shocks only reiterate the international community’s desire to avoid escalating military conflict, which if actualized would lead to more long-term impacts on the price of oil. This fear is particularly felt by the Gulf-oil reliant resource-poor Asian economies. Therefore, if the Trump Administration can successfully depict Iran as this attack’s aggressor, previous hold-outs to Trump’s maximum pressure campaign, such as the EU, Russia and China will have less reason to actively counter the administration’s anti-Iran policy.
As Donald Trump positions this issue as not being a direct threat to the interests of the United States, he presumably insinuated that all actors affected by these events are more in need of the U.S.’s support than the U.S. is in need of them. Indicating this posture was today’s tweet in which he brags of the U.S.’ sufficient self-sustaining energy production and status as a net energy exporter.[6] This statement, coupled with the swift declassification of photos of the attack shows that he is capitalizing on this opportunity to meet his political objectives. In the midst of this capitalization, he implied that Saudi Arabia and other Gulf allies are in need of the US’s assistance in security. Trump’s awareness of the Gulf states’ dependence on the U.S. will be used to build up leverage to meet his transactionalist foreign policy objectives. Until this point, the international community has been cautious in responding to the events, seeking more than the preliminary evidence released by Saudi officials. In turn, Saudi Arabia views Iran as an existential threat. In not accepting the Houthis as the responsible actor in the attack, and subsequently casting blame on Iran, Saudi Arabia can continue depicting Iran as a global threat, (rather than a regional aggressor) thereby encouraging the United States’ to more aggressively counter Tehran.
Ultimately, given the fast-updating nature of the recent attacks on the Saudi oil-field, facts regarding the instigators and consequences of the drone-strike will evolve significantly over the course of the coming days. However, even though the actors behind the attack remain disputed among the involved parties, responses within the immediate aftermath of the attack evidence the ways in which the Trump Administration, Saudi officials, and Houthi leaders have each communicated their stakes in the Gulf region theatre. While prior to the attacks support for President Trump’s maximum-pressure policy against Iran was limited to Saudi Arabia and a few other Middle East allies, now grievances against Iran can arguably be linked to a broader audience of the international community. Only the coming days will tell if this narrative expands the roster of nations willing to acknowledge Iran as a threat to their individual economic security, thus determining the calculation for potential conflict.
Dania Thafer (@Dania_Thafer) is the Executive Director of Gulf International Forum and a Visiting Scholar at Georgetown University.
Read the article in Arabic / لقراءة المقال بالعربي HERE
References:
[1] Ben Hubbard, Palko Karasz, and Stanley Reed, “Two Major Saudi Installations Hit by Drone Strike, and U.S. Blames Iran,” New York Times, September 14, 2019.
[2] Roberta Rampton and Arshad Mohammed, “U.S. Blames Iran for Saudi Oil Attack, Trump Says ‘Locked and Loaded,’” Reuters, Setpember 15, 2019.
[3] Hao Chen et al, “Impacts of OPEC’s Politicial Risk on International Crude Oil Prices,” Energy Economics 57, June 2016.
[4] Rania el Gamal and Aziz El Yaakoubi, “Evidence Points to Iran Involvement in Attack, Says Saudi Alliance, as Oil Prices Soar,” Reuters, September 16, 2019.
[5] Benoit Faucon, Summer Said and Amrith Ramkumar, “Saudi Arabia Aims to Restore a Third of Lost Oil Output Monday,” Wall Street Journal, September 15, 2019
[6] Donald Trump, Twitter Post, September 15, 2019, 5:55 PM.
Dr. Dania Thafer is the Executive Director of Gulf International Forum. Her area of expertise is on the Gulf region’s geopolitics, US-Gulf relations, and the political economy of the Gulf Cooperation Council (GCC) states. She is also a Professorial Lecturer at the Center for Contemporary Arab Studies at Georgetown University. Dr. Thafer been widely published on matters concerning the Arab Gulf states including several articles and publications. She has co-authored two edited books “The Arms Trade, Military Services and the Security Market in the Gulf States: Trends and Implications” and “The Dilemma of Security and Defense in the Gulf Region”. Dr. Thafer is currently writing a book focused on the effect of state-business relations on economic reform in the GCC states. Previously, she worked at the National Defense University’s Near East South Asia Center for Strategic Studies. Dr. Thafer has a master’s degree in Political Economy from New York University, and PhD specialized in the Political Economy and International Relations of the GCC states from American University in Washington, DC.