In the Clancy book Red Storm Rising an Islamic terrorist in Russia starts the globe off towards World War Three by sabotaging the oil terminal in which he works.
In 1941, the Japanese, cut off from American oil, launched attacks that brought the United States (and Japan) into World War Two.
In 1973 the OPEC nations, upset over American support of Israel in the Yom Kippur War, embargoed the shipment of oil, making a weakened American economy spiral into inflation and wrecking the economy for half a decade.
Of course, the first item noted is fiction, but well studied fiction. The second two are history and, to add to it, the 1941 event boosted oil production in Wyoming, which was already being boosted by the September 1939 event, the German invasion of Poland which started the Second World War in Europe. The 1973 event resulted in a massive boom in Wyoming.
This past weekend an attack was launched on Saudi oil process facilities. They were carried out by ten drones. They were so effective that they'd destroyed, on a no doubt temporary basis, 5% of the world's oil output.
What does that mean?
Well, maybe, indeed probably, less than we might suppose.
To start off with, let's just look at the impact. The attacks pushed the price up, but not because they'll result in an oil shortage. There's an oil glut right now and American production remains so high that the real economic impact is at best muted. It pushed the price of oil up to $63.00/bbl, which is over the Wyoming economic viability line, but still only barely. Oil back a couple of decades ago was well over $100 bbl. In 2008 at one point it spiked up to $145 bbl. We're a long ways from that.
And because of the oil glut, we probably won't be seeing a massive rise in price any time soon.
Now for the second part. And that may impact things. Who is responsible for this Middle Eastern drone Pearl Harbor?
Well, it's still being debated.
Saudi Arabia is fighting in the Yemeni civil war, along with the UAE, against Houthi rebels. The rebels took responsibility for the attacks and at a bare minimum, my guess is that the Houthi were at least made aware of it at some point, perhaps after it occurred, and at a bare minimum were happy to take responsibility.
The war in Yemen hasn't gotten much press here, as nothing that happens in Yemen does. Yemen is a backwards state on the Arabian peninsula that has oddly been prey to the twists and turns of global movements in various ways. It was divided into two states following the British departure in which South Yemen, which the British had controlled, becoming a Communist state, showing the influence of the Cold War in the third world at the time. North Yemen became a monarchy. The two countries did not get along and fought, but in 1990 they united in a troubled republic that has more or less been in a civil war since that time.
The war is along tribal and religious lines, with the Houthis controlling most of what had been the former kingdom in the north. Most of them are members of a branch of the shiia sect of Islam.
Which is why the Saudi's likely don't want them to win and are backing the government. Iran is backing the Shiia's, not surprisingly.
The Houthi's, as noted, claim responsibility. But the flight path would be 1,000 kms. That's a lot for rebels that are fighting with a lower level of military technology. It's not impossible, and it could be accomplished with a fair amount if Iranian help, of course. And they have used Iranian built drones before.
Or perhaps the Iranians pulled it off themselves, which is what the U.S. is claiming.
The Saudi's aren't claiming that. Perhaps that's because they're not sure. And perhaps because that does seem extraordinarily risky, even for Iran. A drone strike is a clear act of war that can't be ignored. If its the Houthi's, the Saudis are already fighting in that war and a dramatic air response will be likely.
If its the Iranians, the Saudi's might choose to view it as the Houthi's, particularly if the strike was launched from Yemeni territory. Iran taking a direct role in regional wars from inside the territory of the warring nations isn't anything new at all, and even though this would be a dramatic escalation of it, it would have a precedent and therefore the response would as well.
If, on the other hand, if the drones were launched from Iran, that's another matter.
My guess is that they were launched from Yemen with a lot of Iranian technical assistance. That will mean that some Houthi positions are going to get completely blasted off the face of the earth. It might mean that the Saudis will simply invade the Houthi region, which they are perfectly capable of doing, and then turn it over the to government, after which a lot of Houthi rebels will never be heard from again.
But that's not the only possible outcome, and some possible ones would have a big impact on the price of oil.
It's interesting to note, in all of this, that John Bolton is now gone. His absence probably helps to prevent one of those other options from becoming immediately in the forefront.
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