The publicly traded Saudi Arabian oil and natural gas business Saudi Aramco is based in Dhahran, the capital of the Kingdom of Saudi Arabia. It was one of the world’s most profitable companies in 2020. More than 270 billion barrels of known crude oil reserves are held by Saudi Aramco, the second-largest oil firm in the world.1 Since 1965, it has been the single highest emitter of carbon dioxide globally. The Master Gas System, the world’s largest hydrocarbon network, is owned and managed by Saudi Aramco. Aramco’s roots may be traced back to World War I’s oil crisis and the exclusion of American companies from Mesopotamia under the 1920 San Remo Petroleum Agreement. In 1921, as secretary of commerce, Herbert Hoover announced the “Open Door” policy, which the US government widely supported. US oil companies, including Standard Oil of California (SoCal), were actively searching for new sources of oil supply. This paper will address the following questions: what were the means through which Aramco was attacked? In what ways did the Aramco conflict have an impact? What is the future of Saudi Aramco following the Attack by Yemeni rebels?
Means of Aramco Attack
Yemeni rebels began attacking Saudi Arabian targets, including the Jiddah oil complex and other government installations. Houthi rebels in Yemen launched a barrage of airstrikes on Saudi Arabia, targeting oil infrastructure and other state institutions.2 According to the Houthis, their six-hour attack on Saudi Arabia was directed at the Saudi-Aramco facility in Jiddah, home of its largest oil corporation.3 The Yemeni rebels also mentioned Riyadh, the Saudi capital, two additional oil refineries, Aramco facilities in the south of the country, and other southern targets. Several footage of massive black plumes of smoke rising into the sky due to the attack on the Jiddah oil refinery were published on social media. Firefighters extinguishing flames and burnt concrete husks were seen in a video carried by Al-Ekhbariya, the state television network, of a fire at an electricity complex in the southern part of the nation.
The group’s leader, Abdel-Malek al-Houthi, gave a live statement after the attacks on a station allied with the Houthis. He said that Saudi Arabia was just the “executor” of the country’s seven-year civil war, which he blamed on the United States.4 The United States is a significant arms supplier to Saudi Arabia, which has used those weapons in its battle in Yemen. President Biden’s government, elected on a promise to “intensify our diplomacy to settle the crisis in Yemen,” stated that the US will no longer refuel coalition aircraft and will stop supporting “offensive” actions in Yemen under his administration. However, the eight-year-old peace efforts have stalled. Houthi rebels seized the capital of Yemen in 2015, but a Saudi-led coalition intervened soon after to restore the country’s internationally recognized government. As a consequence of the ongoing fighting, there has been a severe humanitarian crisis and widespread famine.
As the Houthi attacks intensified, the Saudi-led coalition responded with a series of statements. According to the statement, civilian homes and an electrical facility were among the targets of the rebel’s attacks. It was not clear how much damage had been done to the oil facilities, but it was said that no one had been killed or injured in Jiddah, Saudi Arabia’s second-largest city. Aramco did not immediately comment on the extent of damage to its facilities or the effect of the strike on its oil supply.5 The coalition said the Houthi strikes “are a hazardous escalation that jeopardizes energy security and the global economy’s backbone,” emphasizing the risk to the global energy market.6 Saudi Arabia acknowledged the assaults and underlined its commitment to “exercising self-control in support of the achievement of the Yemeni peace negotiations. Houthi militants attacked Saudi energy facilities in at least three cities. Saudi Arabia denies responsibility for any global oil supply shortages and urges the international community to stand up “firmly” against the Houthis to avert attacks that pose a direct threat to petroleum supplies’ security in these highly sensitive times for global energy markets.
Impact of Aramco Conflict
Since 2014, Yemen has been embroiled in a civil war, which was ousted by the government in 2014. The country’s capital, Sanaa, was taken over by the rebels, who forced the internationally recognized government to flee to the south. In 2015, the alliance by Saudi began to combat on the Houthi insurgency in Yemen. Consequently, the Houthis have attacked the southern region of the country many times with missiles and drones.7 According to the Saudi Press, a desalination facility in Al-Shaqeeq, a power station in the south of the city of Dhahran al Janub, and a gas complex in Khamis Mushait were also hit Agency (SPA).8 According to Iran’s state media, the Houthi rebels are said to have carried out four attacks against the monarchy. According to the statement, the airstrikes damaged civilian cars and homes but did not result in any casualties.
Houthi cross-border attacks on Saudi Arabia have become more common as peace negotiations between the two countries have stalled. Since 2015, the conflict between the Iran-backed Houthi rebels and Saudi Arabia in Yemen has ravaged the country.9 In the vicinity of Jeddah, Yemen’s Houthi rebels attacked an oil storage facility and took it over. Seven years of fighting in the neighboring country of Yemen have prompted this latest attack on the Saudi economy. Stalemate in the fight has resulted in one of the world’s most significant humanitarian catastrophes, with many Yemenis suffering from malnutrition, poverty, and illnesses like cholera, according to Saudi military spokesman Brig, an attack on a Saudi Aramco gasoline distribution plant in Jeddah. Gen. Turki al-Maliki. General al-Maliki said that two storage tanks were set ablaze during the attack but that no one was hurt.
Oil markets had already been impacted by the Ukraine crisis. Still, social media photographs of an exploding fireball and a column of black smoke filling the sky appeared to scare them. While oil briefly topped the $120 per barrel mark, it soon dropped back.10 Gulf officials and military analysts have said that Iran is either training and equipping its Yemeni allies to fight independently or carrying out assaults themselves while using the Houthi movement as a cover. Yemen’s Ministry of Defense reported that drone assaults targeted a petroleum products distribution hub in southern Jizan, a natural gas facility, and the Yasref refinery in the Red Sea town of Yanbu. Due to the assault on Yasref’s facilities, the refinery’s production was temporarily reduced; however, increased stocks soon countered this.11 The property was damaged, but no casualties were reported due to the attacks and missiles. Early investigations into the Aramco conflict indicated that Iranian-made cruise missiles were used to hit the desalination plant and Aramco’s Jizan distribution hub. A ballistic missile and nine drones were also shot down by Saudi air defenses. The Yemen’s civil war has led to the death of Tens of thousands of people and millions more have starved to death. Additionally, Houthi attacks on Saudi Arabia’s airports and oil infrastructure have resulted in the deaths of civilians.
The Future of Saudi Aramco
The Houthi attack on a Saudi Aramco factory in Jeddah highlights Iran’s growing threat in North Africa and the Middle East. There has been an increase in attacks on Erbil, Iraq, by Iranian ballistic missiles. A new nuclear deal with Europe is still a goal for Tehran, and it hopes that the US will give in to Tehran’s demands.12 On top of all that, it is engaged in a proxy war with Saudi Arabia. Fars News recently spoke with the Palestinian Islamic Jihad movement, which recently bragged its Iranian support. Iran’s use of drones to strike Israel from Iran over Iraq last year shows how Iran’s threat grows in many directions. “Despite the ongoing conflict in Yemen, we will work with our Saudi allies to strengthen their defenses while simultaneously advancing a lasting resolution to the conflict, improving lives, and creating a space for Yemenis to jointly choose their future “, The US Department of State announced in a statement that was made public.13 After the Yemeni army’s intelligence and reconnaissance circle has identified Saudi Arabia’s most sensitive and critical places, the operation’s succeeding rounds will be executed. While this may seem like a setback, the Saudis are right to ask for additional help from the international community.14 For this reason, the Aramco Company plans to relocate, develop, and expand to become more agile and responsive and assist the industry move toward a more sustainable future. It will become a far more knowledge- and technology-based business in the future.
Expanding into chemicals, boosting renewable energy dependence, creating new technologies via R&D, and expanding into new lines of business via acquisitions and investments are all ways Saudi Aramco plans to enhance its downstream industry. In addition to introducing the corporation and Saudi Arabia to a broader audience, Saudi Aramco’s proposed IPO will also showcase the company’s successes to the investment world. According to Saudi Vision 2030, Saudi Arabian Basic Industries Corporation (SABIC) and Saudi Aramco have agreed to carry out a viability study on constructing a fully assimilated facility of converting crude oil to chemicals in Saudi Arabia.15 Saudi Arabia’s Vision 2030 calls for establishing a world-class downstream sector on the basis of three key drivers. These are increasing crude oil’s production value via horizontal and vertical integration along the hydrocarbon chain, allowing the conversion industries to produce finished and semi-finished goods to broaden the economy and develop a new downstream sector.
From my perspective, the Aramco war Oil and gas markets were thrown into turmoil by the recent attack on Saudi Aramco, which is the largest oil producer in the world. Yemen rebels claimed the attacks on Aramco facilities based in Saudi Arabia. Yemen has been surrounded by instability and violence since Houthi rebels in Iran captured much of the nation. The war has caused one of the worst man-made humanitarian crises globally, with a high percentage of the nation in need of humanitarian protection and assistance. Although Iran has blamed Yemeni rebels, Saudi Arabia and the US intelligence agents have claimed involvement in the incident. For more than a decade, Iran and Saudi Arabia have served as testing grounds for cyber warfare. As a consequence of the attack, Aramco was forced to shut down its network. The Stuxnet virus, which Americans and Israelis very definitely generated, was later blamed by US officials on Iran’s nuclear enrichment program. An ongoing cyber war between the United States and China has spilled over into the physical world and affects other major countries.
Aygül, A. The role of oil in the special relationship of Saudi Arabia and the Us in the Cold War. In II. International Social and Economic Research Student Congress/Full Paper Proceedings Book, p. 443.
Dondorp, M. (2021). Laleh Khalili. Sinews of War and Trade. Shipping and capitalism in the Arabian Peninsula. Verso, London [etc.] 2020. International Review of Social History, 66(2), 3.
Khalili, L. (2021). Sinews of war and trade: Shipping and capitalism in the Arabian Peninsula. Verso Books.
Martin, A. T. (2020). Aramco: The story of the World’s Most valuable oil concession and Its landmark arbitration. BCDR International Arbitration Review, 7(1).
Okur, M. (2020). The United States and Iran: Beating the drums of war?
Winkel, C. (2021). ‘Backstabbed by a friend and Saved by an enemy’: Narratives of war: The ulf War in Saudi oral histories. War & Society, 40(3), pp. 225-242.
- 1 Aygül, A. The role of oil in the special relationship of Saudi Arabia and the US in the Cold War. II. International Social and Economic Research Student Congress/Full Paper Proceedings Book, p. 443.
- 2 Dondorp, M. (2021). Laleh Khalili. Sinews of War and Trade. Shipping and capitalism in the Arabian Peninsula. Verso, London [etc.] 2020. International Review of Social History, 66(2), 3.
- 3 Dondorp, Sinews of War and Trade.
- 4 Dondorp, Sinews of War and Trade.
- 5 Martin, A. T. (2020). Aramco: The story of the World’s Most valuable oil concession and its landmark arbitration. BCDR International Arbitration Review, 7(1).
- 6 Aygül, The role of oil.
- 7 Okur, M. (2020). The United States and Iran: Beating the drums of war?
- 8 Aygül, The role of oil.
- 9 Aygül, The role of oil.
- 10 Winkel, C. (2021). ‘Backstabbed by a friend and Saved by an enemy’: Narratives of war: The ulf War in Saudi oral histories. War & Society, 40(3), pp. 225-242.
- 11 Winkel, ‘Backstabbed by a friend and Saved by an enemy’.
- 12 Winkel, ‘Backstabbed by a friend and Saved by an enemy’.
- 13 Khalili, L. (2021). Sinews of war and trade: Shipping and capitalism in the Arabian Peninsula. Verso Books.
- 14 Khalili, Sinews of war and trade.
- 15 Khalili, Sinews of war and trade.