Arabia faces a serious threat to its main source of revenue – oil exports – as
the volatile Iran situation puts the key Strait of Hormuz shipping route at
risk while Tehran's Houthi rebel allies sabotage Saudi oil pipelines and
shipping routes in the Red Sea, arguably making the Kingdom key to the
developing diplomatic crisis.
The Arab and Western world was put on high alert when Tehran seized a British vessel two weeks ago following the detention of an Iranian oil tanker. It led to increased fears that Iran could shut down the Strait of Hormuz – as it did in the 1984 Tanker War – by attacking oil-carrying ships. A fifth of the world’s oil flows through the Strait, highlighting its economic and strategic importance – but it is not the only action Iran can take to hurt its enemies.
Saudi Arabia has just announced plans to expand the capacity of its east-west pipeline by 40 percent by 2021 in order to avoid its reliance on the Strait.
In addition to this, the US and Britain have both called for joint international cooperation to protect the ships that sail through the channel.
South Korea reportedly sent one of its most efficient units – including a 4,500-ton destroyer – to the Arabian Gulf.
However, analysts suggest that this will not necessarily keep Saudi oil safe – Iran could fight the battle on two fronts with their Houthi rebel allies.
The Kingdom has been fighting the Houthis in Yemen since 2015, who are now starting to take aim at key energy targets in Saudi Arabia.
Two pumping stations on a major pipeline were attacked in May, halting the flow of crude oil and foreshadowing the potential danger that the Houthis could present.
By using the east-west pipeline, Saudi Arabia would have hoped to securely transfer the majority of oil via the Red Sea and the Suez Canal.
The pipeline itself carries 2.1 million barrels of oil a day to the west coast, usually for refinery at Yanbu.
Once it is transferred, five million barrels cross the Bab el-Mandeb channel to the Red Sea every day, while another 5.5 million cross the Suez Canal.
The high volume of oil could prove to be an attractive target, according to political scientist Tarek Fahmi, who is based in Egypt.
He said: “Iran will most likely use the Houthi militia to threaten the maritime movement in the region.
“The Houthis are Iran’s arm in this part of the world.”
As well as attacking the pipeline itself – which the Houthis could easily continue in their quest to destabilize the Kingdom – Saudi tankers could still come under naval attack outside of the Strait of Hormuz.
The Bab el-Mandab, also known as the Gate of Tears, is a narrow sea passage between Yemen and Djibouti.
It is difficult to navigate and presents danger – as Saudi Arabia found out when its oil tankers were hit twice last year.
Oil strategist Julian Lee said: “Diverting more of Saudi Arabia’s crude exports through the Red Sea could, perversely, complicate the task of protecting oil tankers.
“It requires navies to patrol not one, but two chokepoints over which Iran, or militias it backs, have a degree of control.”
On the other side of the “oil battle”, Iran’s vice president called on China and other allies to buy more Iranian oil after sanctions have crippled exports.
He said: "Even though we are aware that friendly countries such as China are facing some restrictions, we expect them to be more active in buying Iranian oil."
Chinese crude oil imports from Iran sank 60 percent in June from just a year earlier.
The Strait of Hormuz is the world’s most important oil passageway – as well as oil, it transports one-third of the world’s liquefied natural gas.
However, separate attacks on four vessels in the 39-km strip – which were blamed on Iran– raised the threat of conflict in the region.