Why have the drone attacks made the West Asian region more tense? Is an all-out conflict possible? How will it impact the global oil economy?
The story so far: Early on September 14, two critical Saudi Arabian oil installations near the Gulf coast came under attack. The drones and missiles that attacked the Abqaiq processing facility and the Khurais oilfield, both owned by Saudi Arabian Oil Company (Saudi Aramco), set off fires which lasted for hours and caused enormous damage, leading to a spike in international crude prices. The attack has also escalated geopolitical tensions in West Asia with the U.S. pointing fingers at Iran and Tehran in turn denying any role in the attacks and warning against any action against it.
How will this development affect the world?
The attacks can have a lasting economic and geopolitical impact. Saudi Arabia is one of the largest producers of crude oil in the world. It produces a variety of grades of crude, including light grade crude which is in high demand in Asia. It produces nearly 10 million barrels of oil every day. In August, the kingdom exported, on an average, 7 million barrels a day. With its spare capacity — the ability to turn up supply to meet emergency demand situations — Saudi Arabia continues to play a critical role in global price stabilisation. In the past, it had pumped up supplies in the event of geopolitical shocks. At present, when the U.S. sanctions are cutting off Iranian oil supply to the global market, consumers are looking at Saudi Arabia and Iraq to make up the fall. Given the critical role it plays in supply, any major attack on the Saudi oil industry will rock the markets. That is what happened on Saturday.
What was the extent of damages?
Abqaiq is the world’s largest oil processing facility. Nearly two-thirds of the total Saudi supply is refined at Abqaiq. The attacks, reportedly carried out with drones and missiles, destroyed the spheroids at the facility that are used to process crude oil, and wrecked five of its 18 stabilisation towers. Satellite images showed that two towers at the Khurais oilfield, some 180 km south-west of Abqaiq that produces more than 1 million barrels of crude a day, were damaged. The attacks knocked out about 5 million barrels of oil output a day, nearly half of the kingdom’s daily production and over 5% of the global output. Following the attacks, crude prices spiked on Monday — the price of a barrel of Brent crude jumped 20% in the morning and closed at $69.02, 14.6% higher than last Friday’s close, the largest single day percentage gain in at least three decades. On Friday, September 20, the Brent crude price closed at $64.77.
Who is behind the attacks?
Yemen’s Houthi rebels have claimed responsibility for the attack. The Houthis, a Shia militia backed by Iran, and the Saudis are locked in a conflict for over five years. Saudi Arabia intervened in Yemen in March 2015 on behalf of the country’s “internationally recognised government” after the Houthis captured Sana’a, the capital city. Since then, the regional coalition led by Saudi Arabia and backed by the U.S. has carried out a number of air strikes on Yemen, while the government forces fought the Houthis on the ground. But the Houthis are still controlling the capital city and much of the country’s north. In recent months, they have carried out cross-border drone attacks, targeting Saudi oil assets and an airport. The Houthis have claimed that the September 14 attacks were in retaliation to Saudi air strikes. But the attacks on Abqaiq and Khurais were, unlike the past drone hits by the Houthis, highly sophisticated. The drones and the missiles evaded Saudi Arabia’s U.S.-supplied air defence system and attacked the heart of the kingdom’s oil industry with pinpoint accuracy. This raised doubts on whether the Houthis possess such advanced capability to successfully carry out such attacks. After releasing the satellite images of the hit facilities, the U.S. has said that the attacks originated from the north or west — pointing to Iraq or Iran — not from the south (Yemen, where the Houthis are operating from). Saudi Arabia later concluded that Iran, whose oil sales have tanked amid biting U.S. sanctions, sponsored the attack.
Are Saudi oil facilities safe?
Recent incidents in the Gulf suggest that neither oil facilities nor supply lines in the region are safe. Since May, oil tankers that pass through the Strait of Hormuz, a choke-point connecting the Gulf (also known as the Persian Gulf and the Arabian Gulf) with the Arabian Sea through the Gulf of Oman, came under multiple attacks. In June, Iran shot down an American drone alleging that it had violated Iranian air space, taking tensions between the two countries to the brink of a conflict. Iran has also seized a British-flagged vessel near the Strait of Hormuz after an Iranian ship was captured by British forces off Gibraltar (it was later released). The incidents near the Strait of Hormuz were a stark warning to global oil trade as a third of crude oil exports transported on tankers pass through the strait.
Now, the attacks on Saudi Arabian oil installations expose the kingdom’s defence too. Unnamed Saudi officials told American media that their air defence had failed to detect and prevent the attacks as they came from the north. The Saudi and U.S. focus, they say, is on the kingdom’s southern border with Yemen from where the Houthis fire drones and short-range missiles. Whatever the reason, the attack showed that there are holes in Saudi Arabia’s defence system. The kingdom, which spends over $80 billion a year on its defence budget (Saudi Arabia was the third largest defence spender in 2018, after the U.S. and China) could not protect its most critical economic assets.
What is Iran’s strategy?
Iran has denied any role in the attack on Saudi oil facilities. But whether Iran was directly involved in it or not, it cannot escape blame as it is backing the Houthis in Yemen’s civil war. The attacks also fit in with Iran’s strategy of disrupting the global energy markets using its military clout in the Gulf in retaliation for the U.S.’s sanctions. After the Trump administration withdrew from the Iran nuclear deal, Tehran waited for a year, urging other signatories including the European Union, Russia and China, to fix the agreement. It wanted to continue to enjoy the promised economic benefits. But those countries remained spectators as American sanctions cut off Iran’s oil industry, critical for the country’s economy, from the global market. Iran’s economy has been in a free fall since Mr. Trump reimposed sanctions. Most of the European companies that promised investments after the nuclear deal was reached have already pulled out of the country. Even countries such as India, one of the top buyers of Iranian crude, cut imports drastically after the U.S.’s sanctions.
The International Monetary Fund has forecast that Iran’s economy will contract by 6% this year. The World Bank has predicted Iran’s GDP shrinking by 3.8%. An economic crisis also means more domestic challenges for Iran’s dictatorial theocracy. The U.S. wants a subjugated, battered Iran to return to talks. But Iran’s rulers picked another strategy — instead of caving in they started pushing back. Iran started violating the nuclear deal step by step while launching attacks at the same time, either directly or through its proxies, on the energy supply lines or infrastructure in the Gulf. Iran has come up with “maximum resistance” to Mr. Trump’s “maximum pressure”.
What is the Saudi Arabian plan now?
Saudi Arabia has claimed that it has partially restored output after the attack. Saudi Aramco chief executive Amin H. Nasser has said the company plans to fully restore production by September-end. The kingdom has also promised that its supply commitments will not be affected as it is tapping reserves and, according to one report, even planning to import crude from Iraq. But even if Saudi Arabia meets its supply obligations and restores full output quickly, the energy markets will remain volatile as geopolitical tensions remain high in the Gulf. There is now a three-way conflict in the region. One, Saudi Arabia and Iran are backing rival factions in Yemen. Saudi bombings have caused enormous damages to Yemen, while the Iran-backed Houthis are targeting Saudi oil assets. Two, in the wider West Asia, Saudi Arabia and Iran are vying for greater influence. Saudi Arabia has the support of most of the Sunni majority countries, while Iran has established solid influence in at least four regional capitals — Baghdad, Beirut, Sana’a and Damascus. Three, tensions between the U.S. and Iran are growing. U.S. President Donald Trump, in response to the September 14 attacks, has decided to step up sanctions on Iran.
But Iran has been aggressive in its responses ever since Mr. Trump pulled the U.S. unilaterally from the nuclear deal in 2018 and re-imposed sanctions on Iran. The fresh sanctions are unlikely to change Iran’s behaviour, given recent incidents. And if the U.S. or Saudi Arabia launch a war on Iran, it could trigger an all-out conflict, as Tehran has warned, that could throw the global energy market into greater turmoil. In short, the Gulf is on a dangerous slope.
Why has the Indian government banned e-cigarettes? What do we know about their use? Why are health workers anxious?
The story so far: On Wednesday, the Union Cabinet approved the promulgation of the Prohibition of Electronic Cigarettes (production, manufacture, import, export, transport, sale, distribution, storage and advertisement) Ordinance, 2019 with immediate effect. As a result, anyone violating it will be imprisoned for up to one year or fined up to ₹1,00,000 or both for the first offence. Storage of electronic-cigarettes shall also be punishable. Besides health concerns, the government is concerned that e-cigarettes can “seriously undermine and derail the government’s efforts to reduce the prevalence of tobacco use”. The ordinance will need to be approved by Parliament when it meets in November.
What are e-cigarettes and how do they work?
Electronic nicotine delivery systems (ENDS) or non-combustible tobacco products are known by many names — vapes, e-hookahs, electronic cigarettes and e-pipes. E-cigarettes may be manufactured to look like traditional cigarettes and are marketed as tobacco-free nicotine delivery devices. instead of burning tobacco leaves like in traditional cigarettes, an e-cigarette, which is a battery-operated device, produces aerosol by heating a solution containing nicotine among other things. The device contains nicotine and flavours in the form of liquid which is primarily composed of solvents such as glycerol and/or propylene glycol. The aerosol containing a suspension of fine particles and gases simulates cigarette smoke. Following a puff, the aerosol is delivered to the user’s mouth and lungs and the rest is exhaled.
What are the effects?
Unlike smoking, the adverse health effects of e-cigarettes are not yet known. But like traditional cigarettes, e-cigarettes too deliver ultrafine particles and nicotine deep into the lungs, which is then absorbed by the blood. A 2018 study found the use of e-cigarette daily was associated with a 79% increase in heart attack risk after other variables were taken into account. According to a white paper on e-cigarettes by the Indian Council of Medical Research (ICMR), depending on the battery output voltage used, nicotine solvents can release in varying amounts potential carcinogens such as acetaldehyde, formaldehyde and acetone. The liquid-vapourising solutions also contain “toxic chemicals and metals that can cause several adverse health effects including cancers and diseases of the heart, lungs and brain”. The ICMR report says: At the population-level the “adverse health impact will outweigh any presumed benefit to individual cigarette smokers”.
Flavours such as diacetyl used in e-cigarettes are linked to serious lung disease. E-cigarettes also contain volatile organic compounds, heavy metals, such as nickel, tin and lead.
In 2016, the U.S. Surgeon General had concluded that “e-cigarette use among youths and young adults is a public health concern; exposure to nicotine during adolescence can cause addiction and can harm the developing adolescent brain.” Nicotine “harms parts of the brain that control attention, learning, mood, and impulse control.” Nicotine also changes the way synapses — connections between brain cells — are formed. This is of concern as more synapses are formed in younger brains.
In animals, aerosol exposure was found to increase “secretion of inflammatory markers, induced airway hyper-reactivity and caused lung tissue degradation in chronic exposure.”
But in 2018, Public Health England, England’s public health agency, reiterated its claim that vaping is at least 95% safer than smoking.
Do they help smokers to kick the habit?
Manufacturers have promoted e-cigarettes as a harm-reducing product. But at present, compared with nicotine patches and nicotine gum, there is limited evidence to support the claim that e-cigarettes help people to stop smoking. On the other hand, the delivery of nicotine is variable and difficult to assess as they come in different sizes. The amount of nicotine in each vial varies; so does the amount of nicotine consumed in each puff. Finally, nicotine content mentioned in the label and the actual amount has also been found to differ.
The U.S. Food and Drug Administration (FDA) has not approved e- cigarettes as an alternative to reduce smoking. One study found that though e-cigarettes led to higher percentage of people quitting smoking, nearly 80% of quitters were still vaping.
Says Dr. Ned Sharpless, Acting Commissioner of the FDA: “Given that most e-cigarette users continue to smoke cigarettes, the answer is not clear [that e-cigarettes aid quitting].”
A 2015 survey cited by The Truth Initiative (an anti-tobacco organisation) found that almost 60% of those who used e-cigarettes also smoked cigarettes, called as dual users. A meta analysis of 25 studies found that smokers who used e-cigarettes as a cessation aid were 27% less likely to quit smoking.
Are e-cigarettes addictive?
According to a National Youth Tobacco Survey, 2018 carried out by Centers for Disease Control and Prevention (CDC), over 3.6 million kids in the U.S. are using e-cigarettes. High school students in the U.S. who used e-cigarettes at least once in 30 days increased from 11.7% in 2017 to 20.8% in 2018; the increase was 48% for middle school children.
Flavours in e-cigarettes have been cited as one of the top three reasons for children to use them. The misconception that “e-cigarettes are less harmful than other forms of tobacco such as cigarettes” is another main reason. Youth who use e-cigarettes may be more likely to go on to smoke conventional cigarettes.