Iranian retaliation and Arab oil

Gary Sick’s writings on Iran have (rightly) been getting a lot of attention recently. In his most recent piece, he warned that, in the event of an Israeli or American attack on Iran,

one might expect disruptions in oil delivery and loading in Arab ports up and down the Gulf, some because of sabotage but others from cyberattacks on the control systems. Iran would attribute these to “the hand of God,” but the more pragmatic effect would be a very substantial portion of the world’s oil suddenly removed from world supply.

That such an attack would sharply drive up oil prices, possibly by a sufficient degree to induce another recession Western economies, seems a reasonable argument. But what are the prospects of Arab oil going offline?

A Crude Threat: The Limits of an Iranian Missile against Saudi Arabian Oil [PDF], a paper published last summer in International Security by Miranda Priebe and Joshua R. Itzkowitz Shifrinson (both of MIT), offers a partial answer.

What would Iran want to attack?

Iran is unlikely to attack Saudi oil fields. To stop production at an oil field, Iran would have to destroy the wells. This would require the destruction of many small targets spread over a large area … Nor is Iran likely to target pipelines, given their small size and ease of repair. Not only are there more than 15,000km of pipeline in the country, but Aramco has taken steps to minimize the effects of pipeline damage … Saudi Arabia’s refined products constitute a small percentage of Saudi exports and are comparatively less important as a percentage of global oil supplies compared with crude oil. We conclude that Iran would target Saudi Arabian stabilization facilities … each stabilization facility is within 300km of Iran and thus within range of most Iranian missiles. As a next-best option, Iran might try to prevent oil from reaching the market by attacking the Saudi export system. (pp177-178)

Stabilization facilities remove natural gas components in crude oil. Saudi Arabia’s main stabilization facility is at Abqaiq (it was subjected to a terrorist attack in 2006). The article finds that:

With current assumptions, more than 1,300 Shahab-type missiles would be needed to target Abqaiq’s towers. With the 400 missiles on hand, Iran would be unlikely to do significant damage. Increasing the desired probability of success raises missile requirements: for example, a 50 percent overall probability of destroying Abqaiq’s towers would require more than 3,300 missiles. Moreover, even if Abqaiq was destroyed, Saudi Arabia would still be able to produce and stabilize 5.6 [million barrels per day] of oil. Therefore, even if Iran has many times the number of missiles we estimate, a significant portion of Saudi Arabian oil is secure. (p192)

In other words, Iran needs more than three times the number of missiles it has just to get 75 percent confidence of destroying any one tower. What if it fired all of its missiles at a single tower?

 Damage would be minimal, because 400 missiles are sufficient to destroy only one tower with a 60 percent chance of success. If the tower were destroyed, Abqaiq’s total capacity would drop from 13 to 12.3 [million barrels per day]. Because, however, Abqaiq runs below half capacity, its destruction would have no long-term impact on Saudi Arabia’s ability to stabilize oil. The facility could still handle its 6.1 [million barrels per day] throughput with capacity to spare. (p193)

Pretty feeble stuff. How long would it take to repair?

If all 1.4 billion barrels in [worldwide] government reserves were employed, the repair window would be nearly fifteen months. A six-to-fifteen-month window is in the midrange of past repair experiences [e.g. after the Gulf War], suggesting that world oil consumption would not be impaired even after a successful Iranian attack. (p195)

All this may have some regional strategic significance, argue the authors:

In showing that the Saudi oil network would be resilient in the face of a concerted attack by one of the most capable actors in the region, our research indicates that threats to regional oil production are overblown. By implication, the United States may be able to reduce its military commitment to the region … in sum, oil is a lucrative target, but it is not universally vulnerable. (p201)

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