International benchmark Brent crude futures jumped above $70 for the first time in nearly two years after Saudi oil facilities were targeted by missiles and drones on March 8. The attack was one of the recently renewed attacks by Yemen’s rebel Houthi movement that used to launch missile attacks on Saudi Arabia infrastructure and territory, including oil tankers and facilities and international airports, in response to Saudi intervention to restore Yemen’s internationally-recognized government.
Although Houthi attacks on Saudi Arabia rarely cause extensive damage or claim lives, the increase of frequency of these attacks in recent months has created unease in the Gulf and international oil markets.
The continuous attacks on oil facilities may add insult to injury for the oil giant Saudi Aramco that has already announced a sharp drop in its profits last year due to lockdowns around the world curbed oil demand.
The recent drone attacks on its installations brought to memory the devastating attack claimed by the Houthis in September 2019, when explosive-laden drones swarmed Aramco’s Abqaiq oil-processing plant and Khurais field and temporarily knocked out about half of Saudi Arabia’s production capacity and caused crude prices to spike.
The recent attacks also bring the question; when is the Yemen war going to end? The seven-year-old war has proved disastrous for the Yemeni people and the Saudi interests as well, sparking the world’s largest humanitarian catastrophe, where tens of thousands of civilians have been killed and more than 14 million people live at risk of starvation.
The Iran-backed Houthis have been fighting Yemen’s UN-recognized government since 2014 and have taken over the capital Sanaa and swaths of the country. A Saudi-led coalition intervened the following year on the side of the government.
In their quest for restoring legitimacy, the Saudi-led coalition began airstrikes campaign that failed to achieve its strategic targets and didn’t prevent the Houthis from using Iranian sophisticated weapons to launch attacks on Saudi and Emirati targets.
Things even got worse for the Saudi coalition after the election of the new United States President Joe Biden, who halted support for Saudi Arabia’s offensive operations in Yemen and vowed to end this conflict and appointed Tim Lenderking, a former senior State Department official, to lead the US efforts in this regard.
However, fighting has intensified as the US steps up its diplomatic efforts to end the conflict, with the rebels not only targeting Saudi oil facilities but also pushing to capture the Yemeni city of Marib, the strategic oil-producing area, and government stronghold. Battles have spread to other areas, including Taiz and Hajjah, where millions of Yemenis face the perils of the fighting.
Finding A Way Out
Following the recent Houthi attacks that targeted a 120,000-barrel-a-day refinery in Riyadh, the world’s biggest oil-export terminal of Ras Tanura and a fuel depot in Jeddah, the Saudi navy began drills in the Arabian Gulf to enhance the security of vital facilities and oil fields, and to secure freedom of navigation in the region’s waters. The official Saudi Press Agency said that Aramco will take part in these drills.
Saudi Arabia went further to ask for help from the US and its allies to defend its oil facilities, underscoring the kingdom’s concern about recent missile and drone strikes that it has linked to arch-rival Iran, stressing that the Houthi attacks do not target the Kingdom of Saudi Arabia only, but also the security and stability of energy supplies to the world, and therefore, the global economy.
According to media reports, the requests of assistance were put to President Joe Biden’s administration since January.
Saudi Arabia even went further to propose a new peace initiative to end the ongoing conflict.
The new initiative, that was declared by the Saudi Foreign Minister and was welcomed by the United Nations, includes a nationwide ceasefire that will be implemented under the supervision of the UN, the reopening of Sanaa International Airport, and the allowing of fuel and food imports through the Hodeidah port.
However, Houthi rebels have rejected the offer saying that they expected an end to the blockade of ports and airports and an initiative to allow in 14 ships that are held by the coalition.
Many analysts see Riyadh’s initiative as a reflection to the kingdom’s desire to find a way out of this destructive conflict.Neverthless, the Houthis and their backers in Iran can see in it a chance to dictate their own terms.
The initiative also aligns with Saudi Arabia efforts to reshape its image as a backer of US policies in the region and alleviate strained relations over the murder of journalist Jamal Khashoggi and the Saudi poor human rights record.
Still ending the Yemeni dilemma may depend on the reaction of the new US administrative that vies to revive the nuclear deal with Iran, considering it one of its foreign policy priorities.
Following the recent attacks, the US administration has expressed alarm at what it called genuine security threats to Saudi Arabia from Yemen’s Iran-aligned Houthis and elsewhere in the region, stressing that it would look at improving support for Saudi defenses.
The US Embassy in Riyadh said Washington was committed to defending Saudi following a volley of drones and missiles, including one aimed at a Saudi facility vital to oil exports.
While White House press secretary Jen Psaki stressed that the US “continues to be alarmed by the frequency of Houthi attacks on Saudi Arabia. “Escalating attacks like these are not the actions of a group that is serious about peace.”
However, several analysts see the US attitude as the direct reason for the escalation from the side of the Houthis, who constitute themselves as an additional barging chip for Iran to use in its nuclear negotiations with the US.
Although Saudi Arabia has succeeded so far to keep its reputation as a reliable and secure supplier to big consumers around the world, the question remains: What could happen if one of these attacks leads to a more direct confrontation between the Saudis and the Iranians?