Saudi oil
attacks
Yesterday’s
breaking news emanating from the Middle East: according to Saudi Arabia,
attacks on its oil installations were sponsored by Iran. A Saudi defence
ministry spokesman said there was no way the strikes could have been launched from
Yemen. Secretary of State Mike Pompeo arrives in Riyadh to discuss response to
attacks as tensions rise. US President Donald Trump orders more sanctions
against the
Islamic
Republic. Iran has sent the US a diplomatic note denying any role in the attacks
on the Saudi oil installations.
Drone attacks
claimed by the Houthi rebels in Yemen have struck the world’s biggest oil
processing plant in Abqaiq, Saudi Arabia, and the nearby Khurais oilfield. The
attacks cut off 5-6 percent of global oil output, which at 5.7 million barrels
a day represents 50 percent of Saudi oil production. These developments
triggered the biggest oil prices surge since the 1991 Gulf War, rising 19
percent before coming down to around 10 percent after US President Donald Trump
announced the release of US emergency supplies from its stocks. Oil producers
say there are sufficient stocks in storage worldwide to make up for the
shortfall. However, there is uncertainty how long it would take to repair the
damage and restart supplies from the facilities struck. Also, traders say a
long-term increase in prices may not be avoidable given the concerns that have
arisen regarding the security of oil supplies. That concern is highlighted by
the Houthis’ threat of more such attacks. Despite the Houthi claims and
statements, US officials have blamed Iran for the attacks and Trump says the US
is “locked and loaded” to retaliate. Iran has denied responsibility and
defiantly said it is nevertheless ready for “full-fledged war”. The UK and
Germany have urged the international community to forge a ‘collective response’
to the drone attacks. It may be recalled that Trump had embarked last year on a
policy of “maximum pressure” on Iran after pulling out of the nuclear restraint
deal. He also imposed severe sanctions on Iran last year to prevent the country
exporting its oil. All this has raised tensions in the Gulf region to the point
where concerns are being expressed everywhere. Both Russia and China have
cautioned against jumping to conclusions and indulging in sabre-rattling or
retaliatory measures without definite evidence or proof of Iran being
responsible. The actual and looming future rise in oil prices could not have
come at a worst time for a faltering global economy or indeed Pakistan’s
struggling one.
On present
trends, the Yemen war seems set to rumble on, and if the recent strikes are any
guide, may result in severe consequences not only for the region, but also the
world, particularly the global economy if more such attacks target oil
supplies. The rational solution to the power struggle in Yemen that has cost so
many lives and reduced millions to near-starvation in one of the poorest
countries in the world is that it should be taken out of the Sunni-Shia
sectarian orbit. The UN and the big powers need to come together to find a
peaceful political solution to the four-year-old conflict that places the will
of the people of Yemen centre-stage and allows them, after a cessation of
hostilities and the necessary arrangements are in place, to express their
choice of rulers peacefully through the ballot box.
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