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Is Iran Considering An Attack On Saudi Arabia?

Simon Watkins

By all accounts, major general Qasem Soleimani – commander of Iran’s Islamic Revolutionary Guards Corp (IRGC) crack ‘Quds’ force that is responsible for foreign military and clandestine operations – is a man of the highest intellect. Instrumental in numerous effective campaigns against Iraq, the Islamic State and in Syria, to name but a few, he has also played a key role in advancing Iran’s political power across the Shia crescent of influence stretching from Syria through Lebanon, Jordan, Iraq, Iran itself, and Yemen. Even if the person effectively in charge of all of Iran’s key military and geopolitical decisions right now was nowhere near as clever as Soleimani, would they not already have worked out that attacking Saudi Arabia’s oil and gas infrastructure has virtually no downside for Iran - but lots of upside - and be thinking ‘what about launching some fresh attacks’?

According to senior Iranian sources spoken to by OilPrice.com last week, this question has been the focus of high-level military discussions in Iran since the aerial attacks on Saudi Arabia’s Abqaiq and Khurais facilities last month. Immediately, these attacks – either done alone by Houthi rebels from Yemen or assisted by Iran, depending on what version is believed – led to the temporary suspension of 5.7 million barrels per day (bpd) of oil production. This equates to well over half of Saudi Arabia’s actual crude oil production capacity, not a capacity figure that Saudi has plucked out of nowhere for geopolitical power purposes in recent years. It resulted in the corollary rise in world oil prices by the largest percentage in a single day ever. This was clearly very good news indeed for Iran.

The longer-term effects were also good for Iran either directly or indirectly. “Due to [U.S. President Donald] Trump’s statements on the subjects of ‘increased isolationism going forward’ and ‘America First’ and then the sacking of [former National Security Advisor and ultra-Iran hawk, John] Bolton it has become obvious to Soleimani that the U.S. has no wish to become involved in another military conflict in the Middle East, let alone with a country like Iran,” said a senior Iran source who works closely with its Petroleum Ministry. In fact, as OilPrice.com exclusively reported at the time, around the time of heightened tensions between the U.S. and Iran after the supposed Iran-led attacks on Saudi oil tankers there was a deep split in the U.S.’s senior Presidential Administration team over the course of action to take.

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On the one hand, when Bolton still National Security Advisor, the U.S. was ’98 percent ready for war with Iran’, according to the Iran oil source, which meant moving at least 120,000 troops into position to augment the U.S.S Abraham Lincoln aircraft carrier group that was already in place. U.S. Vice President Mike Pence was also behind the military option, having earlier said: “The world missed an opportunity last time to confront the regime, but not this time.” On the other side, there were those that believed that because of the size of its military, its terrain, its leadership position in the Shia Arab world, and its absolute control over a multitude of military proxies – including Hezbollah and Hamas – not only would any invasion of Iran be doomed to failure (or at least an endless war) but also it would unleash a never-ending wave of terrorism around the globe.

Among those taking this view, OilPrice.com stated at the time, was Dan Coats, who left his position as Director of National Intelligence U.S. National Intelligence shortly after he testified to a Senate Committee prior to the withdrawal of the U.S from the Joint Comprehensive Plan of Action (JCPOA) deal that there was no indication that Iran was attempting to develop a nuclear weapon and that Tehran remained in compliance with the deal. Another was reportedly the CIA’s Head of Iran Mission Center, Michael D’Andrea, known as ‘the Dark Prince’ for his work in the U.S.’s sharp-end counter-terrorism operations after the ‘9/11’ attacks, and even the key figure in organising the elimination of one of Hezbollah’s leaders, Imad Mougniyeh, in Damascus, in 2008.

“Because of this split of opinion, a whole range of options have opened up for Soleimani, and at the top of the list is undermining Saudi Arabia from every angle possible,” said the Iran oil source. Soleimani is likely to benefit in this endeavor from the Saudi’s own now-legendary stupidity in dealing with the oil industry community. Saudi’s statements after the attacks on Abqaiq and Khurais were widely ridiculed, particularly over how much spare capacity it actually has and how long it would take to restore this. These were all forensically examined by OilPrice.com at the time but can be summarised by the words of a usually extremely diplomatic oil industry expert when he told OilPrice.com that: “It was extremely telling that he spoke of ‘capacity’ and later of ‘supply to the market’, as these are terms that Saudi tends to use in order to avoid talking about actual production, as capacity and supply are not the same thing at all as actual production at the wellheads,” he said. “The Saudi statements may not contain any direct falsehoods as such but nor are they entirely being fulsome with the truth,” he added.

Not only has the Saudi’s oil production capability been damaged by a much greater degree and for much longer than they admitted but also many seasoned oil industry experts know it was lying and not just this: it has created even further distance in the long-standing ‘deal’ between the U.S. and Saudi Arabia overpower for oil. This deal dates back to a meeting on 14 February 1945 between the then-U.S. President Franklin D. Roosevelt and the Saudi King at the time, Abdulaziz held onboard the U.S. Navy cruiser Quincy in the Great Bitter Lake segment of the Suez Canal. The deal they agreed, which has persisted ever since was this: the U.S. would get all of the oil supplies it needed for as long as Saudi had oil in place, in return for which the U.S. would guarantee the security both of the country and of the ruling House of Saud.

In recent years, though, there have been severe tests to the deal, beginning in 20114 when Saudi decided to try to destroy the then-nascent U.S. shale industry by pushing oil prices down through over-production to such a degree that the U.S. shale industry was bankrupted. As the Saudis were leading this strategy it understandably ended in complete disaster for Saudi and for all other OPEC members that followed it but the U.S. did not forget what it had tried to do. In more recent times, Saudi has become increasingly toxic for the U.S. given a slew of evil and/stupid deeds, including – but not limited to: the involvement of 15 Saudis out of the 19 terrorists behind the ‘9/11’ atrocity, the war in Yemen, the alienation of Qatar, the kidnapping of Lebanon’s then-President Saad Hariri and then forcing his resignation, and the murder of journalist Jamal Khashoggi. “Iran knows that literally the only things keeping the U.S. supporting the Saudis and not pulling out of there as well as it is doing with Syria is that Iraq is not yet ready to be a total substitute for the Saudi oil flows and nor is U.S. shale production,” said the Iran oil source.

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There are other benefits for Iran from further attacks on Saudi as well, though. One is that the attacks caused strains in the increasingly uneasy relationship between the U.S. and its NATO partners. Various leading European politicians said at the time that the U.S. should not rush to believe that Iran was behind the attacks and Turkey’s President Recep Tayyip Erdogan did the same. This was quickly followed by the Turkish army rolling into northern Syria with the threat that it will annihilate the Kurdish population there – who it regards basically as terrorists – despite the U.S. having promised the Kurds (in Iraq, Iran, and Syria) a fully independent Kurdistan in exchange for the Kurdish Peshmerga army fighting Islamic State for the West on the ground. Another benefit for Iran – one that is truly rich in irony – is that the attacks on Saudi caused the Saudis to start to check oil prices for oil from other countries of a similar grade, including grades from Iraq. One of the most common ways that Iran has been side-stepping U.S. sanctions is to simply ‘rebrand’ its oil at the border with Iraq (or on ships) as ‘Iraqi oil’ with Iraq then selling it on and splitting the profits with Iran. In sum then, Saudi may well have ended up buying oil from Iran, just with the stickers changed on the barrels.

Given all of this, the Iran oil source told OilPrice.com last week, the IRGC since the attacks have been busily working away at modifying what was essentially 1969 missile technology from Russia to produce missiles with a much longer range than many medium-range missiles, that are extremely mobile as they can be launched from adapted lorries, and have a virtually real-time remote control handling system that makes them both incredibly difficult to shoot down and incredibly accurate. More specifically, according to various reports including the Iran oil source, Iran unveiled this new guidance system upgrade, called ‘Labeik’ only last week. This, according to a number of sources – including the highly authoritative ‘Jane’s Defence Weekly’, would be compatible with the Fateh-110 series of rockets, and with Zelzal heavy artillery rockets. “Soleimani is looking to roll these out not just in Yemen but also in other key strategic sites in Iraq, Lebanon, Syria, Sudan, and Somalia,” said the Iran oil source. “In order to support this, the IRGC was just given a 55 percent increase in the air defense budget,” he concluded.

By Simon Watkins for Oilprice.com

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