This is because the foiled attack poked large holes into two theories often floated out by the Saudis and optimistic oil analysts to assuage concerns over infrastructure security in the world's "Central Bank of Oil."
That prices soon recovered from a $2 spike following news of the attack doesn't mean that Al Qaeda's imprint has disappeared from the cost of a barrel of light sweet crude, as of this writing hovering at $61. Since mid-2003, analysts have estimated that $8 - $10 of the cost of a barrel reflects a "terror premium," the result of oil sabotage in Iraq and threats by Osama bin Laden that Saudi Arabia could expect the same. Now that an Al Qaeda campaign against Saudi oil has apparently begun, that premium can be expected to rise.
Meanwhile, it may not get the headlines triggered by attacks in the Gulf, but pipeline sabotage in Iraq continues, offering a sobering lesson about what a determined few can accomplish wherever there are unprotected supply lines, which is every oil producing country in the world.
There have been 14 reported attacks on Iraq's oil infrastructure so far in 2006, bringing the total since the U.S.-led invasion to almost 300. And these are just the ones big enough for us to know about. Though one-third of Iraq's security forces and some 14,000 mercenaries now patrol Iraqi refineries and 5,000 miles of pipelines, attacks (and threats of attacks) continue to hamstring exports and punish reconstruction efforts with chronic domestic fuel shortages. The oil-rich country is bleeding its wealth into the sand along with its blood.
"This is a new situation," says Gal Luft, an energy expert at the Institute of the Analysis for Global Security in Rockville, MD. "What has changed in the last year or so is that, because of the rise of China and India, the world oil market lacks liquidity and spare capacity, so any attacks on supply, any barrel of oil removed from market due to sabotage, immediately effects the market prices."
"There is a clear understanding [on the part of Islamist groups] that if you want to hit America or the West, you go after oil, which is right in their backyard," says Luft. "They don't have to go all the way to New York and deal with the INS and FBI."
That the pipeline attacks have undermined more than just the U.S. occupation in Iraq was first recognized by Osama bin Laden in an audiotape released Dec. of 2004. In the tape he called upon his followers to "focus your operations on the oil, especially in Iraq and in the Gulf, as this would mean [the West's] death."
Within 24 hours of the tape's release, five attacks were carried out on Iraqi oil facilities, with similar attacks reported in Pakistan, Sudan and Nigeria. Jihadist message boards lit up in enthusiastic agreement with the call to go for the oil jugular.
"O horses of Allah, go for a ride," reads one post translated by the Washington-based SITE Institute. "There is nothing that terrifies the Infidels more than attacking the oil sources."
Another post notes: "A small operation on an oil tanker will make the Infidels of London, Paris, Washington and Tel Aviv shake with fear."
"A handful of small attacks made against Saudi infrastructure could push oil well over $100 a barrel," says John Robb, an independent analyst and author of the forthcoming book Global Guerrillas. "Twenty or so a month will keep it there. We are about to see the rise of a shadow OPEC. The control of oil doesn't rest in the hands of the governments. It is in the hands of the guerrillas that can stop the flow."
Stopping this flow is easier than many think. As last week's news reports of the Abqaiq attack reminded us, more than half of Saudi oil reserves are found in just eight fields, nearly two-thirds of which is processed at the mega-facility in Abqaiq, near the Gulf of Bahrain. From here, the oil is shipped through two primary terminals. The larger of the two, Ras Tanura, processes a tenth of the world's oil supply daily; the other, Yanbu, is connected to Abqaiq by an unprotected 750-mile umbilical pipeline. Were a terrorist cell to hijack a few planes in Kuwait and crash them into one or more of these facilities -- soft targets all -- it could take up to 50 percent of Saudi oil off the market for at least six months, says Gal Luft.