Widening

Three Filipinos were reported injured in a Houthi missile attack on Riyadh’s King Khalid International Airport last Saturday. The same airport came under missile attack just a day after.

Missile attacks like this one underscore the vulnerability of Saudi Arabia in what could be a widening theater of conflict in the Middle East. That vulnerability translates into greater uncertainty over the world’s energy supplies.

The Saudis have been pressing the US for military support for weeks. They have been feeling the pressure after lightning Houthi campaigns that brought more Yemeni cities under their control. Previous Houthi missile attacks damaged the vital east-west oil pipeline that Saudi Arabia – and the global market – needs to avert a supply crisis. The lightning campaign helped the Houthis consolidate control over the vital Bab al-Mandeb strait – a waterway that is even tighter than the Strait of Hormuz.

Donald Trump earlier rejected Saudi appeals for air attacks against the Houthis. Earlier, the Americans cut a separate peace with the Houthis. They won a pledge that American ships traversing the Red Sea would not be attacked. In exchange, US forces would not launch air attacks on Houthi positions.

After this weekend’s missile attack on the Riyadh airport, Trump promised military support to the Saudis. But Trump being Trump, we do not really know how much of a response that might be.

We all know the US lost 13 of its military bases in the Middle East to Iranian drone offensives. The looming shortage in US precision weapons is widely recognized. The US Navy has pulled its aircraft carrier way out in the Indian Ocean, out of Iranian missile range. In short, the Americans do not have the stockpile of military hardware to support a sustained engagement against the Houthis.

It is easy to characterize the Houthis as a ragtag rebel force. But over the past few years, the group has developed serious missile capabilities – with Iranian support. The group has also consolidated control over the more populous portions of Yemen. The Houthis actually govern a larger population than the Saudi regime does.

Over the past few months, we saw Houthi missiles launched against targets in Israel. Saudi installations are even closer. While they may not be able to march an army into Saudi Arabia (considering the Saudi-Pakistani military alliance), they could disrupt Saudi oil production.

Saudi Arabia is now hemmed between Iran across the Persian Gulf and the Houthis to the south. It will have difficulty defending against missile barrages when the Houthis and Iranians act in concert. Without the military pact with Pakistan, the Saudi regime may be in great peril of collapsing.

Last week, Trump shocked his own partisans by announcing the US will purchase diesel fuel from Russia. No details have been released about how the US will pay for the Russian deliveries. A couple of months ago, Russia announced that it will sell its oil only in rubles or in yuan. Until last week, too, the US has been penalizing countries that buy Russian fuel.

The deal with Russia underscores the vulnerability of the US to oil supply shortages. The Americans could, of course, import diesel from Canada at a lower price. But Trump has completely antagonized the Canadians with his bizarre trade war against America’s closest neighbor. Three weeks away from midterm elections that will determine control of the US Congress, diesel prices are spiking in the US. Blame Trump.

This week, Trump might be compelled to engage the Houthis, quite likely through intensive air strikes. A second war front will be opened. The American public will not support this. American commercial shipping could be threatened. Trump will just keep on losing.

America’s strategic petroleum reserves are at rock bottom. These reserves wee used to moderate prices after the US attack on Iran. There is no stockpile left to cushion the price impact of the most recent developments.

In a word, the energy supply forecast is bleak as the northern economies head towards winter. Despite Trump repeatedly declaring the contrary, the Strait of Hormuz remains choked. The Houthis could choke shipping through the Suez Canal and the Red Sea. The US military, despite its much vaunted prowess, could not bring the world under its control.

After the Strait of Hormuz was choked, China restrained its oil imports by shifting its energy production to renewables. This helped contain the price shock from the war in the Middle East.

Last month, China announced it would restrict exports of processed fuels to the Philippines as a penalty for our anti-Chinese posturing. This will have grave implications for us. The Philippines, totally dependent on imported oil, buys its refined oil products from Singapore and China. The refineries in both countries depend on oil shipped from the Persian Gulf.

If the fuel supply situation is grave in the US and Europe, it is frightening for us. It will be costlier to buy processed products from Russia. Ukrainian drone attacks on Russian refineries put a question mark on its ability to supply third countries.

As the situation in the Middle East evolves perilously, our fuel supply is in imminent danger. Our economy is unhealthy as it is. Our currency has been depreciating. Our growth is further slowing. We import not only the oil we need but also more of the food we cannot do without.