Punishing Trump: New War on Saudi Refineries by Iran Allies

Ann Arbor (Informed Comment) – The Trump administration’s 13 nights of strikes on Iran, including on bridges and energy infrastructure, have been followed by three nights of calm. The Iranians, however, clearly do not trust Trump to halt his war of aggression on their country for very long, especially with the visit to Washington, D. C. this week of Trump Whisperer, Israeli Prime Minister Benjamin Netanyahu. Even Trump is complaining about Netanyahu’s loud campaign to have Trump bomb specific targets in Iran.

To show what they thought about Netanyahu’s warmongering against them, the Islamic Revolutionary Guards Corps (IRGC) commanders sent a barrage of missiles against covert US bases in Jordan early on Wednesday local time.

Iran’s allies, the Iraqi Shiite militias (“Popular Mobilization Units”) and the Helpers of God militia in Yemen, known as Houthis for the family that leads it, have picked up Tehran’s own strategy of replying to US attacks on Iran by sending drones and missiles against regional US allies.

On two occasions this week, missiles struck the massive Abqaiq oil refinery in Saudi Arabia’s Eastern Province, igniting fires that can be seen by satellite and forcing the Saudis first to suspend production there and then to halt it entirely.

The US and Saudi Arabia blamed the Popular Mobilization Forces in Iraq for the attacks on Abqaiq, which is responsible for refining on the order of 7% to 9% of global crude. Crude oil is useless until it is refined into products such as gasoline and diesel. If the Abqaiq facility cannot quickly be repaired and it stays offline, that will cause oil prices to rise. The US and Saudi Arabia flew fighter jets to bomb installations of the Shiite militias early on Wednesday local time.

Then the Helpers of God in Yemen claim to have hit, as well, a terminal that feeds oil from that refinery into the pipeline running from eastern Saudi Arabia to Yanbu.

As a result of Trump’s 13 nights of striking Iran in violation of the Memorandum of Understanding he signed at Versailles Palace on June 17, the Houthis in Yemen have launched a campaign against Saudi Arabia and its oil.

Last Saturday the Houthis damaged a refinery at the Red Sea port of Jazan, causing the Saudis to take 400,000 barrels a day offline as they struggle to repair it by August 15. International supplies are already tight because a billion barrels were taken off the market this spring and summer by the closure of the Strait of Hormuz. Every 400,000 barrels a day that isn’t produced and exported tightens up that market even further.

The Yanbu pipeline can handle 7 million barrels a day. It had been transporting 3.5 million barrels a day before NetanyahUmp launched their unprovoked attack on Iran. With the Strait of Hormuz closed, the Saudis diverted another 3.5 million barrels a day through the pipeline so that it could be shipped south via the Red Sea through the Bab al-Mandeb, the narrow opening between the Red Sea and the Gulf of Aden that opens to the Indian Ocean. If that pipeline is seriously damaged, petroleum prices will soar.

Photo of Jeddah, Red Sea port, by shahad hassan on Unsplash

So far the damage at Abqaiq and Jazan appears to be relatively minor and both could be back online in August. The message from Sanaa and Baghdad, however, is that if Trump thinks further attacks on Iran will be painless economically, he has another think coming. Gasoline inched back up in the US to over $4 a gallon during Trump’s most recent air campaign on Iran. The price was $2.70 before Trump took the country to war on the say-so of Netanyahu and the late Lindsey Graham, and many Trump voters are being badly hurt by the high prices.

Those prices could go substantially higher. The US, Europe and China avoided a debilitating price spike in petroleum only by releasing state and private reserves, running down stockpiles to 50-year lows. There is now much less give in the system. If the Strait remains closed for the most part for another two months, a sudden and unprecedented shortage of gasoline and diesel could develop very quickly, especially if China comes back into the market.

The war on Saudi oil facilities by the Houthis and the Iraqi PMF could exacerbate this looming catastrophe.