Perpetuating oil supply uncertainties: US removes air defence system and Patriotic batteries from Saudi Arabia

 

It’s confirmed that the US has started removing its state-of-the-art air defence system and the Patriotic missile batteries from Saudi Arabia for reasons unknown to the rest of world, leaving the move open to various interpretations.

Saudi Arabia has been under attack by Houthis from neighbouring Yemen for the past few years. The Iran-backed rebels have been increasing the sophistication of the explosive-laden drones and missile in recent months, sending them across the border at an exponential rate.

The air defence system provided the Kingdom with a reasonable protection against the projectiles, which were targeting Saudi assets ranging from airports to oil fields at heightended frequency. A very recent attack resulted in civilian casualties; in the past, there had been fatalities.

In this context, the removal of batteries when the Saudis are under attack is like taking the crutches away from a man who struggles to move from point A to point B, carrying his own weight as his biggest burden.

When the news about the removal of the air defence system first came to light during this week, those who couldn’t believe it put a feeble spin on it by saying it was purely for ‘routine maintenance purposes’.

That notion, however, was debunked by none other than someone close to the ruling Saudi royal family, Prince Turki al-Faisal, the Kingdom's former intelligence chief.

In an interview with the CNBC the prince said: "I think we need to be reassured about American commitment”, while adding, “that looks like, for example, not withdrawing Patriot missiles from Saudi Arabia at a time when Saudi Arabia is the victim of missile attacks and drone attacks — not just from Yemen, but from Iran."

The first indication that the US-Saudi relations has taken a turn for the worse came to light, when the scheduled meeting between Lloyd Austin, the Defence Secretary and his Saudi counterpart was abruptly cancelled this week. Neither side accounted for the decision.

The Saudis suffered in the face of missile and drone attacks when the air defence system had been in place with its full power. We can just imagine the inevitable impact on Saudi installation in the absence of it, in the coming weeks or months, when Houthis ramp up the attacks.

The unprecedented development is going to cause one thing for sure – the disruption of the crude oil supply to the world. There are plenty of uncertainties in the markets and when the Kingdom is forced to fight on its own to keep the threat at bay, conditions just perpetuate the uncertainties with far reaching global consequences.

It is no secret that the Biden Administration and Saudis do not see eye to eye on many issues. Military analysts, however, never saw this was coming.

Some even attribute the acceleration of the withdrawal of the air defence system to the OPEC+ refusal to increase the output, when the US requested to do so. Since Saudi Arabia is the de facto leader that pulls the strings in the cartel, there may be some truth in it.

Of course, firing patriotic missile to destroy oncoming drones or missile is not a cheap exercise; on the contrary, it is expensive with each costing over $3million in order to shoot down a drone that may be worth just $200. In the absence of an alternative, Saudis do not have a choice when it comes to keeping them at bay.

As for the crude oil markets, analyst will take into account the Houthi attacks on Saudi Arabia much more seriously than they did in the past as it has potential to disrupt the supply at any given moment.