Jihad for Oil

When bin Laden dramatically addressed the United States in a video released on the eve of the 2004 elections, he boasted of his “bleed-until-bankruptcy” plan for defeating America. His focus on the economy is a primary reason that the terrorist leader reversed his original pledge to keep oil off limits as a military target. In his 1996 declaration of war against America, bin Laden said that oil was not part of the battle because it was “a large economical power essential for the soon to be established Islamic state,” but in a December 2004 audiotape he reversed this promise. Declaring Western countries’ purchase of oil at then-market prices “the greatest theft in history,” he stated: “Focus your operations on it [oil production], especially in Iraq and the Gulf area, since this [lack of oil] will cause them to die off [on their own].”

Bin Laden’s deputy Ayman al-Zawahiri called for al-Qaeda fighters to “concentrate their campaigns on the stolen oil of the Muslims” in a December 2005 video. Likewise, Sawt al-Jihad, the online magazine of al-Qaeda in the Arabian Peninsula, claimed in February 2007 that cutting the U.S.’s oil supplies “would contribute to the ending of the American occupation of Iraq and Afghanistan.”

SAUDI ARABIA IS THE MOST critical oil-producing country that terrorists have targeted. Saudi efforts are vital to stability of the worldwide oil supply because that country holds 25 percent of the globe’s proven reserves, produces almost 10 million barrels per day, and is the only country that can maintain excess production capacity of around 1.5 million barrels per day (a “swing reserve”) to keep world prices stable. However, Saudi production is particularly vulnerable to attack because it depends on a limited number of hubs. Two-thirds of Saudi Arabia’s oil is processed at the Abqaiq facility, and there are two main export terminals: Ras Tanura and Ras al-Ju’aymah.

Terrorists have in fact directed their efforts toward attacks against these hubs. In September 2005, following a 48-hour shootout with a cell in the seaport of al-Dammam, police discovered forged documents that would have given the terrorists access to some of Saudi Arabia’s key oil and gas facilities.

Terrorists affiliated with al-Qaeda in the Arabian Peninsula also obtained sensitive access to facilities for a February 2006 attack on the Abqaiq refinery, which is operated by the state-owned Saudi Aramco. Though local news sources played down the attack (one even described it as proof of “how tight and impenetrable the existing Saudi security system is”), written evidence submitted to Britain’s House of Commons by Neil Partrick, a senior analyst in The Economist Group’s Economist Intelligence Unit, paints a different picture. Noting that the attackers wore Aramco uniforms, drove Aramco vehicles, and were able to enter the facility’s first perimeter fence, Partrick concludes that either the terrorists “had inside assistance from members of the formal security operation of the state-owned energy company” or else security was so lax “that these items could be obtained and entry to the site obtained.” Either possibility is a concern.

Could a catastrophic attack against Saudi production succeed? Such an attack could be executed using tactics that al-Qaeda has successfully employed in the past. For example, it would be difficult to safeguard facilities against an airplane used as a guided missile, à la 9/11. Thus, former CIA case officer Robert Baer wrote in his 2003 book Sleeping with the Devil: “A single jumbo jet with a suicide bomber at the controls, hijacked during takeoff from Dubai and crashed into the heart of Ras Tanura, would be enough to bring the world’s oil-addicted economies to their knees, America’s along with them.”

The Abqaiq refinery that was targeted in February 2006 is also a critical point of vulnerability. If a major attack is successfully executed in one of these locations, the reduced worldwide oil supply would be joined by an inflated risk premium. Julian Lee, a senior energy analyst at the Centre for Global Energy Studies in London, told the Guardian in 2004 that following a significant loss of Saudi oil, “it would be difficult to put an upper limit on the kind of panic reaction you would see in the global oil markets.” The ramifications would be not only economic but also military: Sawt al-Jihad may be correct that such an attack could doom U.S. ventures in Afghanistan and Iraq.

In addition to catastrophic attacks, terrorists can undertake disruptive attacks against specific nodes. The recent activities of the Movement for the Emancipation of the Niger Delta (MEND) show the effect that disruptive attacks can have. Saudi Arabia pledged to produce an extra 200,000 barrels of oil per day beginning in July 2008 to curb record prices, yet MEND and its copycats knocked more than that offline in a single week: an attack on Shell’s Bonga field coupled with two attacks on Chevron’s Abiteve Olero crude oil line cut Nigeria’s output by about 400,000 bpd. Though the Nigerian facilities will be repaired, this demonstrates how disruptive attacks can scotch the market’s supply expectations.

THE SITUATION IS GROWING more rather than less perilous: Gal Luft and Anne Korin of the Institute for the Analysis of Global Security have noted that growing worldwide demand has reduced OPEC’s spare capacity from seven million barrels a day in 2002 to only two million today (less than 2.5 percent of the market). “As a result,” they write, “the oil market today resembles a car without shock absorbers: the tiniest bump can send a passenger to the ceiling.” Moreover, global consumption is only expected to increase: the world is projected to have 1.25 billion cars on the road in 2030, up from 700 million today.

A major terrorist attack against the oil supply would dramatically change the global order, in ways that most policymakers have probably never contemplated. The threat of terrorism thus adds urgency to current discussions about alternatives to oil.