Sunday, February 27, 2011
Middle East oil war spreads. First demos in Saudi Arabia, Iraq refinery blasted
DEBKAfile Exclusive Analysis February 26, 2011
Iraq's biggest oil refinery at Baiji, 180 kilometers north of Baghdad, was blown up early Saturday, Feb. 26, by an Al Qaeda cell activated by the Iranian Revolutionary Guards Al Qods Brigades, debkafile's Middle East sources report. Tehran is using the Middle East turbulence to generate fuel shortages in Iraq and boost oil prices worldwide.
Thursday night, Feb. 24, saw the first signs of unrest in Saudi Arabia with demonstrations by young people demanding reforms of the kingdom's system of government and by Shiites living and working in the kingdom's oil-rich eastern regions. They demonstrated at Awwamiya in Qatif in solidarity with the protests in Libya and Bahrain. They also demanded the release of detainees rounded up by Saudi security authorities among the two million Shiites living and working in the main oil centers of Saudi Arabia to nip potential unrest in the bud. Friday, in the Red Sea town of Jeddah in the west, a group calling itself "Jeddah Youth for Change staged a demonstration.
The slightest sign of unrest in Saudi Arabia, the world's biggest oil exporter, is bound to affect the price of oil. Iran is the biggest beneficiary of soaring prices. Day after day, as Arab capitals are beset by popular turbulence, Tehran is watching the damage caused its economy by international sanctions shrinking.
In 2010, sanctions slashed Iran's oil revenue from $120 billion to $80 billion, i.e. 6.6 billion a month, whereas in February, 2011, it shot up to $10 billion as a result of Middle East unrest.
Early Saturday, Tehran gave the oil market another nudge by knocking Iraq's biggest refinery out of action just hours after clashes with anti- government rallies left nine dead in three North Iraqi towns.
The gunmen shot four refinery guards and engineers and blew up the Al Shamal unit, its main kerosene and benzene producer, leaving sticky bombs in other operational units to explode after they fled. It took hours to put the fire out. The entire installation is now closed. "We are not talking about days," said a refinery official, "The damage is too severe."
The Baiji refinery working at 70 percent capacity produced 150,000 barrels per day. Oil experts estimate that Iraqi towns face a 35 percent decline in petrol supplies for several months, with effect on world prices and domestic stability in the country.
debkafile's intelligence sources report that the sabotage of the Iraqi refinery marked another stage in the fuel war becoming an integral part of the rising tide of protest engulfing the Middle East since Tunisia's Jasmine Revolution erupted in January. On February 5, the Palestinian Hamas used the uprising in Egypt to blow up the Sinai gas pipeline to Israel and Jordan. Supplies have been cut off since then.
In Libya thus far both Muammar Qaddafi and the opposition fighting him, mainly in Cyrenaica, have refrained from touching the country's export trade of 1.8 million dollars a day. However, the fighting in oil-sensitive areas is thought to have cut supplies by half. It is estimated that Libya's partition between Cyrenaica and Tripolitania will split half of its oil resources roughly equally between the two entities, leaving the export terminals with the rebels.
Whoever ends up ruling Tripolitania will have to come to terms with Cyrenaica over the use of those facilities or build new ones. That is why Qaddafi's opponents are fighting so crucially for control of the four outlying towns of Tripoli on the Mediterranean coast - Sirte, Misrata, Zawiya and Zuara. Without them, the Libyan ruler has no way of exporting the oil produced in Sahara fields.