Saudi Arabia is facing a difficult dilemma as it tries to stay out of the war between the US and Iran. Ever since the US and Israel launched their war on Iran on 28 February, the Saudis have largely tried to avoid direct involvement, but after being attacked from three sides they have responded with joint strikes alongside the US on Iranian proxy militias in Iraq.
The question now is whether Riyadh should continue hitting back to deter further attacks, or whether it should seek de-escalation, possibly by paying off some of its adversaries. The answer is complicated by the growing number of actors involved and by the fact that Saudi Arabia's own economic plans depend on stability.
Saudi Arabia's Crown Prince has embarked the country on a course known as Vision 2030.
This week, Saudi Arabia and the US carried out strikes on a site belonging to Iraq's paramilitary Popular Mobilisation Forces, which Saudi Arabia believes has been used to launch drones at the Kingdom.
Who is fighting who in the Gulf conflict?
There are broadly two sides in the conflict that has been consuming the Gulf and other parts of the Middle East for five months now. On one side is Iran and its Islamic Revolutionary Guards Corps (IRGC), along with the Houthis in Yemen, a tribal group that took over much of the country in 2014, and the Popular Mobilisation Forces in Iraq, the paramilitary group that has allegedly carried out 30 drone strikes on Saudi Arabia and has now been attacked in return. Hezbollah in Lebanon is also backed by Iran and remains a potent force, although it is currently lying low.
On the opposite side is the US with its immensely powerful Central Command (Centcom) forces, plus to varying degrees the Gulf Arab states and Jordan. Israel remains a close US ally but is currently not an active participant in this war.
Iran has most recently been concentrating its drone and missile attacks on Jordan, Kuwait and Bahrain, as well as targeting any commercial shipping that tries to slip through the Strait of Hormuz while avoiding Iran's new rules and routing. The addition of Iraqi militias and the Houthis in Yemen is a relatively new phenomenon and it shows how, without a lasting peace deal between the US and Iran, the region risks becoming ever more embroiled in a widening conflict.
Why is Saudi Arabia trying to avoid a wider war?
Saudi Arabia is trying not to get sucked into a full-scale conflict for several reasons. Its de facto ruler, the relatively young Crown Prince Mohammed Bin Salman, has embarked the country on a course known as "Vision 2030". His aim is to diversify the Kingdom away from its dependence on oil revenues and create vibrant, modern, domestic industries that will provide meaningful jobs for the hundreds of thousands of graduates and school leavers pouring onto the job market each year.
Part of Vision 2030 involves attracting foreign investment. Part of it also involves building things like data centres that are vulnerable to attack. This is not going to work if Saudi Arabia finds itself under an enduring, long-term threat from drones fired across its southern border by the Houthis in Yemen or ballistic missiles fired directly by Iran.
Back in September 2019, the Saudis suffered an unpleasant shock. With relations with Iran in a poor state, the Saudis woke up to find that an Iranian proxy militia in Iraq had launched a fleet of drones at two of its most vital oil facilities, at Abqaiq and Khurais.
At the time there was a suggestion that the attack had come from the Houthis in Yemen but I visited the site straight afterwards and I could clearly see the holes in the superstructures all facing northwards.
That attack knocked half of Saudi oil exports offline for several days and it was a wake-up call to Riyadh as to just how vulnerable its critical national infrastructure is to attack.
On Monday, satellite images showed the Abqaiq oil facility was struck by drones launched once again by Iranian proxy militias in Iraq.
Why does the Strait of Hormuz matter so much?
Oil is still the lifeblood of the Saudi economy. Iran retaliated to US and Israeli attacks in February by effectively closing off the Strait of Hormuz, a critical shipping channel between Iran and the Gulf through which 20% of the world's oil and liquified natural gas travelled.
In response, the Saudis pumped as much oil as they could – around five million barrels per day - through their east-west pipeline to their export terminal on the Red Sea, on its opposite coast, at Yanbu. From there it was loaded onto tankers that headed south, out into the Arabian Sea and off to markets in Asia.
How has the fighting in Yemen affected Saudi Arabia?
On 13 July, the Saudis bombed Sanaa airport just outside the Yemeni capital. The strike was claimed by Yemen's Saudi-supported government, which said it wanted to prevent an Iranian plane from landing. In retaliation, the Houthis attacked regional Saudi airports at Abha and Jizan.
More worryingly for Riyadh, the Houthis have begun attacking Saudi shipping in the Red Sea, making it extremely dangerous for ships to pass through the narrow Bab El Mandeb strait at the southern end of the Red Sea. That in turn chokes off Saudi oil exports to Asia.
Saudi Arabia spent seven years trying to bomb the Houthis into submission and failed. The war that raged across Yemen was one of the worst humanitarian disasters of our time and its effects are still being felt.
In 2022, Saudi Arabia agreed to an uneasy truce with the Houthis and there were reports of payoffs, but now the richest country in the region, Saudi Arabia, is once more facing the threat of drone and missile attacks from its southern neighbour at the same time as attacks from Iraq to the north.
None of this was envisaged in the plans for Vision 2030.
Key Facts
- The US and Israel launched their war on Iran on 28 February.
- Saudi Arabia and the US carried out strikes this week on Iranian proxy militias in Iraq.
- Iran has targeted Jordan, Kuwait and Bahrain, and commercial shipping in the Strait of Hormuz.
- Saudi Arabia says an Iraqi proxy militia has carried out 30 drone strikes on the Kingdom.
- On 13 July, Saudi-backed forces said they struck Sanaa airport, prompting Houthi attacks on Abha and Jizan.
