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How will the attack on Saudi oil facilities affect the situation in the Middle East?

Sep 11 , 2019

How will the attack on Saudi oil facilities affect the situation in the Middle East? Following the Heavy duty drill pipe supplier would like to share with us.

World oil markets reacted to the early morning attacks on two key Saudi oil production facilities with a jump in prices. The attacks on the two aramco facilities have reduced production by about 5 million barrels a day. The iranian-backed houthis immediately claimed responsibility, but U.S. secretary of state mike pompeo was quick to point the finger at Iran. So what impact will this attack have on the situation in the Middle East?

Saudi oil fields under attack, Iran not immune

So far have not found direct evidence to confirm this action by Iran's planning implementation, but look from the attack on the accuracy and the timing of the launch, it hardly seems completely in its outside Iran: first, the houthi forces is Iran directly support, second, the effect of the attack Iran's situation will not cause points (although Iran could face further sanctions).

U.S. secretary of state mike pompeo took to twitter immediately after the attack to accuse Iran of being behind the attack, noting that "Iran has been behind more than 100 attacks against Saudi Arabia." Professional military media analysis indicated that the attack may have used the russian-made KH55 cruise missile. U.S. cable news network (CNN) is also reported that in January this year, a United Nations panel has confirmed the houthi armed drone attack remote distance can reach 1300-1500 km, the houthi forces from their control area close enough to attack oil facilities in two places, and long-range drone technology directly from Iran.

The attacks on Saudi oil production facilities, whether carried out directly by the houthis or under the guidance of Iran, were an attempt to "turn the beast into a beast". Iran may be motivated by two considerations: continuing to cause manageable regional tensions; Iran has determined that Mr Trump remains a bully about attacks on non-us targets.

Iran is in the midst of an economic downturn. The United States struck hard at Iran by punishing countries that trade oil with it and kicking it out of the petrodollar settlement system, which prevents Iran from conducting normal oil trade with other countries and obtaining dollars. The ban on oil exports has cost Iran roughly billions of dollars in lost revenue, according to U.S. government statistics.

Bijan Zanganeh, Iran's oil minister, said in June that Iran's oil exports were now more vulnerable than when the country's oil fields were attacked during the iran-iraq war in the 1980s.

"Our situation is worse than during the war," he was quoted as saying by the Associated Press. Even when saddam hussein attacked our industrial facilities, we did not have this export problem. Today, we cannot export oil that is labeled Iran."

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By September 17th, according to the American government, Iran's oil exports had fallen to 230,000 barrels a day (about a 30th of Saudi Arabia's). The shortage of foreign exchange has caused domestic prices to soar, with inflation reaching 48 percent, while vegetable and meat prices have risen more than 100 percent in the past year. "Today, the country is facing the biggest pressure and economic sanctions in the last 40 years," President Hassan Rouhani said on Iranian state television earlier this year.

Faced with a difficult external situation, Iran hopes to use regional tensions to push up oil prices. In the face of the us ban, Iran now trades some of its oil mainly through the Instex trade settlement system between the eu and Iran, as well as through rosneft. Only part of the revenue from Iran's oil exports goes to the government. By keeping regional tensions high, oil prices could rise, increasing Iran's revenues even if it did not reap all the gains. This is an important reason why Iran wants to maintain tension in the region.

The reason Iran dares to create regional tensions is that they judge that Mr Trump would not wage a war that directly overthrows the current Iranian government. In dealing with Mr. Trump and watching the United States deal with other crises, the Iranian leadership may draw conclusions that Mr. Trump is a bully. This gives Iran room to use small-scale crisis incidents to stimulate regional situation and continuously test the bottom line of the United States, so as to win the initiative in subsequent negotiations to ease Iran's plight. (although rouhani said again on the 17th that he would not negotiate with the United States, he also reiterated the possibility of engaging the United States in multilateral negotiations.) In this case, it is perfectly understandable that Iran would direct or direct the houthis to launch an attack on Saudi Arabia, since targeting Saudi Arabia rather than the United States would reduce the risk of direct confrontation with the United States, but would also inflict economic damage on Saudi Arabia, an ally of the United States.

On September 18, the Saudi defense ministry held a press conference in Riyadh, capital of Saudi Arabia, to show the missile and drone debris collected at the site of the attack on the oil facility.

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