Summary

Two instances of sabotage on Saudi oil infrastructure suggest the possibility of Iranian blowback from mounting tensions with the United States.

The first case reportedly took place near the Strait of Hormuz at the mouth of the Persian Gulf over the weekend. Four tankers in all received damage from an unknown source – two Saudi vessels, one Norwegian, and another from the United Arab Emirates. The sabotage is said to have occurred while the ships were docked off the coast of Fujairah in the UAE.

Days later, the Kingdom’s pipeline network experienced a drone attack on a pumping station in Eastern Province. As a result, the 1,200 km East-West Pipeline which pumps oil for export at the Red Sea port of Yanbu was temporarily shut down. The Yemen-based Houthi rebels – an ally of Tehran – have apparently claimed responsibility for the attack.

Both incidents have oil traders worried that US-Iran tensions could lead to a spike in market volatility.