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Saudi Oil Infrastructure at Risk as Small Attacks Raise Potential for Big Disruption

Cyber attacks, for instance, could play a surprisingly large role in the event of conflict, gumming up the oil system or even causing damage. “Iran has significant cyber capabilities and in the event of a significant US military action against Iran, one could expect that they might deploy these capabilities against the U.S. and its allies,” said John MacWilliams, who was an associate deputy secretary and chief risk officer in the Department of Energy in the Obama administration.

Mr. MacWilliams said the Pentagon monitors Iran’s cyber skills and likely has plans to counter them. “It is one more important reason that containing military action from spreading quickly to a larger conflict may prove difficult,” he said.

The evidence, so far, is that the market and the oil industry can take some bumps in stride. Oil prices have ticked up slightly this week to $72 a barrel for Brent crude but still remain below the recent high of nearly $75 a barrel in late April.

“What the market thinks is that although these incidents are important and noteworthy, they have so far not had any impact on actual production or exports,” said Neil Atkinson, head of the oil industry and markets division of the International Energy Agency, the Paris-based multinational group.

Analysts also say that oil installations are resilient, with most damage easily and quickly repaired. The Saudis have been through a series of wars in the Gulf and have rejiggered their installations with potential threats in mind. “They don’t have a prayer,” said Sadad I. Husseini, a former executive vice president of Aramco, speaking of the possibility of serious disruptions of the kingdom’s oil exports.

In the event of a major conflict, some analysts figure that the large presence of United States military forces in the area would mean that Iran would have only limited success if it tried to stop oil flows from the Gulf. “Iran is still a very limited military power if things escalate,” said Anthony H. Cordesman, a Gulf defense expert at the Center for Strategic and International Studies in Washington. Mr. Cordesman added that the consequences of a conflict in the region “would be higher prices and limited flows, not a prolonged closing of the Gulf.”

With territory along most of the eastern side of the Gulf, including the vital Strait of Hormuz, Iran is well positioned to cause trouble. Mr. Binnie said that in a war situation Iran could fire anti-ship missiles with radars that fasten onto large targets. “Tankers would be extremely vulnerable in that scenario,” he said.


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