IP93

ACIS Iran Pulse Number 93 ● May 19, 2019

Iran's Yemen Proxies Convey Calibrated Message with Attacks on Saudi Oil Infrastructure

Micha’el Tanchum* 

The May 14, 2019 drone attack on two oil pumping stations in Saudi Arabia by Iraniansponsored Houthi forces in Yemen was a sophisticated operation, forming a carefully calibrated response to the tightening oil sanctions against Iran. The attacks were preceded three days earlier by acts of sabotage against ships in UAE’s oil port of Fujairah. Taken together, these attacks against oil export infrastructure of the leading Gulf state members of the anti-Iran bloc were a signal that the collective ability of Saudi Arabia, the United Arab Emirates, and other Gulf countries to replace Iranian oil is not assured.

The attack on the two pumping stations that supply Saudi Arabia’s Petroline pipeline caused minor damage to only one of the stations, according to Saudi Arabia’s Ministry of Energy, resulting in a temporary shutdown of the pipeline for evaluation as a precaution. On the day of the drone attacks, a television station operated by Houthi forces reportedly claimed the rebels had conducted drone attacks on Saudi installations, without specifying the exact time of the attacks or the targets.

In prior attacks on Saudi Arabia, Houthi rebels have used Qasef-1 drones, copies of Iran’s Ababil-2 drone that apparently are also produced in Iran, despite Houthi claims of local production. The Qasef-1 was used to conduct the May 2018 attack on Saudi Arabia’s Abha International Airport. The one runway airport that services flights to Egypt and Saudi Arabia’s Gulf neighbors is located approximately 100 km from Saudi-Yemen border. The two pumping stations hit, almost a year later, are located over 700 km from Saudi Arabia’s border with Yemen. Therefore, this most recent drone attack represents a considerable upgrade in the sophistication of the Houthi forces’ drone capability, suggesting the use of the 1,400 km range UAV-X drone, reported to be in their possession.

In contrast to large targets like oil storage tanks, the pumping stations that were attacked are relatively small targets by comparison. More difficult to hit, especially over such long distances, and not inflicting any spectacular damage for the effort, the deliberate targeting of the pumping stations that supply the Petroline pipeline was specifically tailored to threaten Saudi Arabia export outlets outside the Persian Gulf, without providing a pretext for a major escalation.

Petroline, also known as the East-West pipeline, transports oil from Saudi Arabia's oilproducing Eastern province on the Persian Gulf westward, a distance of 1,400 km to the oil refineries at Yanbu on Saudi Arabia's Red Sea coast. Located some 300 km northwest of Jeddah, the Yanbu port is a major oil terminal for the kingdom. The maximum capacity of the pipeline is roughly 5 million barrels per day (bpd), and is being expanded to 6.5 million bpd. Currently, Saudi oil exports are hovering just under 7 million bpd, and so the expanded Petroline pipeline could theoretically be used to continue Saudi Arabia's global exports unabated in the event of a disruption in the security of the maritime domain in the Persian Gulf. 

The UAE's Fuajirah port performs a similar function in providing security of export supply routes in the event of conflict in the Persian Gulf. Therefore, it too was targeted through the sabotage of Saudi and Emirati vessels anchored off the port. Fujairah is world's second largest bunkering (ship refueling) port and a major oil storage center, whose already large storage capacity the UAE seeks to more than double by 2022.

Strategically located on the UAE's eastern coast on the Gulf of Oman, outside the Persian Gulf and its Strait of Hormuz choke point, the Fujairah port also provides another critical export outlet immune to disruption in the Persian Gulf. The Abu Dhabi Crude Oil Pipeline (ADCOP) runs from the UAE's Habshan oil field to Fujairah, where it supplies oil to the refinery there as well as the export terminal.

The spare production capacity of Saudi Arabia, the UAE, and Kuwait are crucial for the success of the U.S. oil sanctions against Iran, as this spare capacity can be used to keep global oil prices stable despite the removal of Iranian oil from the market. However, the oil produced by these nations is of no use if it cannot be securely exported. Saudi Arabia's Petroline pipeline, the UAE's ADCOP pipeline and Fujairah port are critical back-up supply routes, should conflict break out in the Persian Gulf.

The attacks are a message for Riyadh, Abu Dhabi, and Washington as the U.S. escalates its crippling economic pressure on Iran, particularly in the wake of the U.S. ending sanctions waivers in early May 2019 for Iran's largest purchasers of oil. Iran's economy had already contracted by 3.9 percent in 2018, and was forecasted to shrink by another 6 percent in 2019 prior the announcement of the end of waivers. With general inflation over 50 percent and rising, and the inflation rate on food at 85 percent and rising, Iran's economy is on the verge of entering into a death spiral.

The desperate situation was made even worse by Washington's May 8, 2019 announcement that it would impose sanctions on Iran's industrial metals industry. Primarily iron, steel, aluminium, and copper, these metal exports constitute Iran's largest revenue source outside its hydrocarbon-related exports, providing 10 percent of the country's export revenue.

For its part, Tehran has made no claim to be involved with either set of attacks and maintains plausible deniability. Describing the sabotage at Fujairah as "alarming" and "regrettable," Iran's foreign ministry spokesperson warned of the intervention of foreign forces in the Gulf, and called for further clarification of what occurred. The incidents at Fujairah are currently being investigated by the UAE with assistance from Saudi Arabia, the U.S., Norway, and possibly France. While the circumstances surrounding the Fujairah attacks remain murky, Iran's proxies in Yemen were clearly involved in the attack on Saudi Arabia's Petroline pipeline. It is unlikely that Iranian-supplied Houthi forces would conduct such an attack without at least tacit permission from Iran's IRGC Qods force.

Ninety percent of Iran's oil is exported from its Kharg Island terminal, located 25 km off the Iran's Persian Gulf coast and 483 km northwest of the Strait of Hormuz. Saudi Arabia and the UAE's dependency on the Persian Gulf for their own oil exports, traditionally created a mutual deterrence against any party disrupting the security of the shared maritime domain. However, the creation of Persian Gulf bypass routes by Saudi Arabia and the UAE, have removed that mutual deterrence, and created a severely asymmetrical vulnerability for maritime Iran's oil exports. 

By striking at oil export infrastructure that bypasses the Persian Gulf without inflicting serious damage, a carefully calibrated message was communicated that these bypass routes are in fact vulnerable to attack and therefore the strategic calculus in Riyadh and Abu Dhabi should again be based on mutual deterrence. It is doubtful that this warning will be heeded as intended. For its part, Saudi Arabia has reason to believe its pipeline is sufficiently resilient, as Saudi Aramco is amply supplied with spare pipeline parts. Riyadh is more likely to focus on further augmenting its air defenses. Abu Dhabi would probably take a similar approach.

The U.S. strategy of 'maximum pressure,' is creating for Iran a quickly diminishing time-window in which to act. Should Iran decide not make overtures to Washington and its Middle East allies, Iran's 'use-it-or-lose-it' position, provides Tehran's decision makers with incentive to jump up several rungs in the escalation ladder. Proxy attacks emanating from both sides of the divide would then accelerate and increase in their intensity.

*Dr. Micha’el Tanchum is a Fellow at the Truman Research Institute for the Advancement of Peace, Hebrew University and non-resident, affiliated scholar with the Center for Strategic Studies at Başkent University in Ankara, Turkey (Başkent-SAM) 

Tel Aviv University, Ramat-Aviv 61390, Tel Aviv P.O.B. 39040, Israel