By Vincent Prayugo
In the early hours of September 14th, 2019, Saudi Aramco’s oil refineries were attacked by drones and missiles claimed by Iranian-backed Houthi rebels in Yemen. The attack caused oil production in Saudi Arabia to plummet by more than half. The Houthis claimed the attack was retaliation against Saudi Arabia due to the latter’s intervention in the Yemeni Civil War since 2015. Although the attack was not the first in Saudi Arabia’s recent history, with similar strikes in May, it was the most destructive and expensive to date. The success of the operation exposed some of the weaknesses of Saudi Arabia’s airspace defenses and the fragile state of their economy.
Despite billions of dollars in annual investment in the Saudi’s military, the attack exposed the gaps in the Kingdom’s defenses and the vulnerability of US Patriot PAC-2 surface to air missiles. The Aramco facility, which was under the Patriot PAC-2 umbrella, failed to stop the assault carried out by low flying drones and cruise missiles. Since the Cold War, the US has been focusing on developing long-range anti-ballistic missile defenses. Although the Patriot PAC-2 system is designed to be capable of detecting drones and cruise missiles, its main objective is to defend against ballistic missiles. The Patriot system utilizes radar instruments to detect a missile’s trajectory and heat signature to differentiate between missiles and other flying objects. Drones and cruise missiles fly much closer to the ground, making them harder to detect and intercept. A drone’s small size could also mask its heat signature, preventing Patriot systems from properly identifying the attack. On the economic side, the use of Patriot defense systems against drones is expensive, with each missile costing around three million dollars while drones are considerably cheaper. The failures of US-built anti-air defense systems has opened up opportunities for Russia to wrestle the US as the top seller of weapon systems in the region, with Russia beginning talks with Middle Eastern countries to pitch their S-300 anti-air defense system immediately after the attack. This move mimicked Russia’s previous involvement in the region, with Russia successfully sold their S-300 to Turkey.
The aftermath of the attack also showed the fragile state of Saudi Arabia’s oil-dependent economy and the United States’ position in the region. The disruption in oil production forced Saudi-Aramco to buy oil from other countries, such as the UAE and Kuwait in an effort to fulfill its foreign obligations. Similarly, Saudi Arabia’s production disruptions shift the international market towards other countries, such as the Bahrain and Russia. The sudden increase in demand for oil could also help Iran cope with the sanctions imposed on them by the United States due to their dependence on oil exports, demonstrated by China’s increasing demand for Iranian oil. In the long term, the attack damaged the country’s reputation on its economic infrastructure risk, with Fitch downgrading Saudi Arabia’s credit rating from A+ to A. Saudi Arabia’s dependence on oil exports has also caused significant deficits in their fiscal health in the last several years due to low oil prices. Combined with the recent attack, which wiped out 5% of the global supply or roughly half of Saudi Arabia’s production, the country’s economy took a serious blow.
Despite the Saudi Arabia’s attempt to repair its facilities in a timely manner, Iran and the Houthi rebels caused considerable damage on Saudi Arabia’s economy and America’s influence in the region. The failure of Saudi Arabia to defend itself has caused unease in the international market and exacerbated Saudi Arabia’s economic troubles. The recent missile attack on an Iranian tanker off the coast of Saudi Arabia could also signal an escalation between the two countries, with Tehran blaming the attack on Saudi Arabia. If left unresolved, the escalation could increase the intensity of Iran-backed Houthi rebel activity or a direct conflict between Saudi Arabia and Iran.
1 Roblin, S. (2019, September 23). Why U.S. Patriot missiles failed to stop drones and cruise missiles attacking Saudi oil sites. Retrieved November 1, 2019 from https://www.nbcnews.com/think/opinion/trump-sending-troops-saudi-arabia-shows-short-range-air-defenses-ncna1057461.
2 Army Technology (2019). Patriot Missile Long-Range Air-Defence System. Retrieved November 1, 2019 from https://www.army-technology.com/projects/patriot/.
3 U.S. Army. Appendix A The Patriot Air Defense System. Retrieved November 1, 2019 from https://history.army.mil/books/www/WWWAPENA.HTM.
4 Taylor A. (2019, September 17). Billions spent on U.S. weapons didn’t protect Saudi Arabia’s most critical oil sites from a crippling attack. Retrieved November 1, 2019 from https://www.washingtonpost.com/world/2019/09/17/billions-spent-us-weapons-didnt-protect-saudi-arabias-most-critical-oil-sites-crippling-attack/
5 Baker, L. (2019, September 30). After Saudi attacks, Russia makes its regional presence felt. Retrieved November 1, 2019 from https://www.reuters.com/article/us-mideast-russia-geopolitics-analysis/after-saudi-attacks-russia-makes-its-regional-presence-felt-idUSKBN1WF15K.
6 El Gamal, R. and R. Buosso (2019, September 24). After attacks, Saudi Aramco trading arm seeks oil to meet deliveries: sources. Retrieved November 1, 2019 from https://www.reuters.com/article/us-saudi-aramco-attacks-supply/after-attacks-saudi-aramco-trading-arm-seeks-oil-to-meet-deliveries-sources-idUSKBN1W91X4.
7 Al Jazeera. (2019, October 16). US ‘concerned’ over untrackable China ships carrying Iran oil. Retrieved November 1, 2019 from https://www.aljazeera.com/news/2019/10/concerned-untrackable-china-ships-carrying-iran-oil-191016081016944.html.
8 Turak, N. (2019, September 30). Fitch downgrades Saudi Arabia’s credit rating stressing a ‘risk of further attacks’. Retrieved November 1, 2019 from https://www.cnbc.com/2019/09/30/fitch-downgrades-saudi-arabias-credit-rating-to-a-over-attack-risks.html.
10 O’Connor, T. (2019, October 15). Iran Said Another ‘State’ Was Behind a Missile Attack on Its Oil Tanker. Retrieved November 1, 2019 from https://www.newsweek.com/iran-state-missile-attack-oil-tanker-1465482.