Saudi Arabia: a new front
On Friday 24 February, two cars loaded with explosives were used in an attempt to target the world's largest oil-processing centre at Abqaiq, eastern Saudi Arabia (where a liquefied natural-gas plant is also located). This is the first attack specifically directed at oil production in the kingdom most of the armed operations over the past two years have been targeted at expatriate residential compounds or oil-company offices.
Abqaiq, northeast of some of the largest Saudi oilfields (including the huge Ghawar field) handles around two-thirds of the entire oil production of Saudi Arabia. After processing at Abqaiq, most of the oil is funnelled to the massive refinery at Ras Tanura on the Persian Gulf coast; it is then exported from the Ras Tanura terminal, the world's largest offshore oil-loading facility.
The spate of paramilitary attacks in Saudi Arabia in recent years has ensured that Abqaiq is particularly well-guarded, indeed the most heavily-protected plant in the kingdom. It is perhaps no surprise, then, that the attack failed. The assailants killed two guards and injured others, and reports suggested they managed to inflict some damage to a pipeline; security guards who fired back killed four of the insurgents.
In addition to his weekly openDemocracy column, Paul Rogers writes an international security monthly briefing for the Oxford Research Group; for details, click here
Paul Rogers has recently written a report for the Oxford Research Group on the likely effects of a military attack on Iran:
"Iran: Consequences of a War" (February 2006)
A collection of Paul Rogers's Oxford Research Group briefings, Iraq and the War on Terror: Twelve Months of Insurgency, 2004-05 is published by IB Tauris
The importance of the Abqaiq plant and the febrile state of the oil market combined to ensure that even this abortive operation on a single Saudi facility was enough to force the price of oil futures up by more than $2 a barrel.
A website used by al-Qaida quickly hosted a claim of responsibility for the attack by one of the movement's affiliates. The posting named the two "martyrs" killed, announced that the operation followed an earlier pledge from Osama bin Laden to destroy such targets, and warned of further attacks. This latest incident was "part of the project to rid the Arabian peninsula of the infidels", and was intended to stop the "pillage of oil wealth" from Muslims.
On Monday 27 February, Saudi security forces surrounded a group of paramilitaries in a suburb of Riyadh; in the bitter, two-hour exchange of fire that ensued, five people were killed and one captured. The Saudi authorities announced that the dead and the detainee were all linked to the Abqaiq attack.
The relative paucity of media coverage of Abqaiq makes it easy enough to downplay its significance. Saudi Arabia, the argument goes, has taken very firm action over the past decade to suppress the armed campaign by militant Islamists including frequent arrest sweeps and the killing of suspects.
The assumption has grown that the Saudi authorities have the situation under strict control. In this perspective, and given the massive security in place at Abqaiq, the attack is seen as little more than a forlorn attempt by al-Qaida to gain publicity for a losing cause.
It is less certain that the oil industry and some specialist western security agencies which did pay close attention to Abqaiq can afford to be so sanguine.
Iraq: economic targeting
In any case, Abqaiq's significance is underlined by what is happening just across the border in Iraq. While media attention focuses on the insurgency and sectarian violence in Iraq, the sustained paramilitary offensive against economic targets itself partly responsible for the uncertain state of the oil-futures markets is relatively neglected. This remarkably effective campaign has crippled the prospects for reconstruction and done much to make the insurgency more effective.
This contrasts markedly with the Bush administration's "spin". Among a series of congressional hearings, Condoleezza Rice appeared before the Senate budget committee on 16 February to help the administration secure supplementary budgeting to finance the war, and spoke of the "struggle for the creation of a stable and democratic Iraq". The picture of progress she portrayed is to be polite at fundamental variance with the facts.
The most revealing statistic is oil production: January's total of 1.7 million barrels a day (mbd) was down by more than 30% from the post-invasion peak (2.5 mbd, in September 2004) itself below pre-invasion levels (see Guy Dinmore, "Iraq Economy Falls Below Pre-War Levels", Financial Times, 16 February 2006). Thus, nearly three years after the start of the war, and with hundreds of billions already spent, oil-rich Iraq cannot even match the oil output of a Baghdad regime limited by sanctions.
Much of the shortfall is down to continuing sabotage by insurgents, which both necessitates expensive security measures (costing up to 50% of the budget of some schemes) and ensures that barely a third of planned water projects and only two-thirds of supplementary electricity projects have been completed (see Eric Le Boucher, "The Other Failure in Iraq: The Economy", Le Monde, 18 February 2006). As a result, electricity supplies in Baghdad average 3.7 hours a day (compared with at least 16 before the start of the war); only half the population has access to drinking water, compared with two-thirds before.
Much of the current effort of United States forces is concerned with training Iraqi security and police forces and pipeline guards. Condoleezza Rice gave a figure of 227,000 "quality" Iraqi forces, supplemented by around 160,000 troops from the US and its coalition partners, and at least 10,000 private security contractors. In all, there are therefore supposed to be around 400,000 troops and security forces devoted to controlling an insurgency that is said to affect barely a quarter of the country; yet sabotage and other attacks continue at such a rate that the prospects for economic revival are being crippled.
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Perhaps the key lesson here is that determined and dedicated insurgents have a capacity to damage the economy of a country that far outweighs their numbers, even in the absence of much outside help. If that is the case, then the Abqaiq attack is a sharp reminder of what the al-Qaida movement could do if it chose to take this route. While most of the Iraqi insurgency is homegrown, it is also serving as a training-ground for jihadists from abroad, not least Saudi Arabia, and that training will almost certainly include a proficiency in economic targeting.
Furthermore, even if al-Qaida and its associates are put to one side, there remains the much greater potential that an Iran bombed by Israel or the United States could engage in precisely this kind of asymmetric warfare. The failed Abqaiq attack is, in its own way, an indication of that potential and constitutes yet one more reason for taking every care to avoid a military confrontation with Iran.
More generally, Donald Rumsfeld's sought-after transition from the cold war to the long war (see "The world as a battlefield", 9 February 2006) is based on his innate belief in American military superiority and its ability to control an unstable and fragile world order. A failed attack on a key oil facility may not rate much consideration in the Pentagon. In reality it is as much a marker for the future as the burgeoning American defence budgets.