https://www.wsj.com/articles/irans-return-handshake-11568578218
Since President Trump withdrew from the 2015 Iran nuclear deal, the Islamic Republic has tested U.S. resolve with military escalation across the Middle East. Likely Iranian involvement in attacks on Saudi oil production over the weekend marks a new phase in this destabilizing campaign, and it’s no coincidence this happened as Mr. Trump is considering a softer approach to Tehran.
Saudi Arabia reduced daily oil production by about 5.7 million barrels after strikes against facilities in the country’s east on Saturday. Iran-backed Houthi rebels claimed credit, though Secretary of State Mike Pompeo tweeted that Iran was responsible and there was “no evidence the attacks came from Yemen.” Iran denies this, but it usually uses proxies to avoid a direct confrontation and there are no other plausible culprits.
This is more than a local dispute between two regional powers. The attacks have caused a roughly 5% reduction in global daily oil production. The Saudis have promised to dip into reserves to offset the losses, but oil prices could rise and harm an already fragile global economy if the Kingdom isn’t able to restore production fast enough.
American shale oil production can take up some of the slack but that would take time. Long-term damage to oil supplies would increase the pressure on the U.S. to ease sanctions on Iranian oil exports, which Mr. Trump has been considering.
The attack continues what is already a hot proxy war between Iran and Saudi Arabia, an important U.S. ally. The extent of the damage raises doubts about how well the Saudis can defend against future drone assaults. Saudi intelligence and air defenses don’t seem up to the job. Saudi revenues would be hurt by a reduction in oil output, and uncertainty will complicate an initial public offering of the country’s national oil company, Aramco.
Even if the Houthis didn’t carry out this attack, Iran is backing their war against an Arab coalition in Yemen. The Houthis have become increasingly aggressive in attacking sites in Saudi Arabia and oil tankers in the Red Sea. If the Saudis cede Yemen to the Houthis, Iran will have won another proxy war, this one on the Arabian peninsula. The Saudis are far from ideal allies, but U.S. Senators who want to end U.S. support for Riyadh should consider the alternative of Iranian regional dominance.