Key facts
- Saudi Arabia is attempting to stay out of the US-Iran conflict that began on February 28.
- The kingdom faces a dilemma between deterrence and de-escalation.
- Attacks from Iranian proxies in Iraq and Houthis in Yemen threaten Saudi infrastructure and oil exports.
- Saudi Arabia's Vision 2030 economic diversification plan is at risk from regional instability.
- The Strait of Hormuz, a critical oil shipping route, has been impacted by Iran's actions.
Saudi Arabia is grappling with a complex dilemma as it attempts to navigate the escalating conflict between the US and Iran, which began on February 28. The kingdom has largely sought to remain neutral, but faces increasing pressure from attacks by Iranian proxies. This precarious position threatens the ambitious Vision 2030 economic diversification plan spearheaded by Crown Prince Mohammed Bin Salman, which relies on attracting foreign investment and developing industries vulnerable to regional instability.
The conflict involves Iran and its allies, including the Houthis in Yemen and paramilitary groups in Iraq, on one side, and the US and its Gulf Arab allies on the other. Iran has recently focused drone and missile attacks on Jordan, Kuwait, and Bahrain, as well as commercial shipping attempting to transit the Strait of Hormuz. The involvement of Iraqi militias and the Houthis signifies a widening conflict in the region.
Saudi Arabia's strategic calculus is influenced by past vulnerabilities. A 2019 attack on its critical oil facilities at Abqaiq and Khurais, attributed to an Iranian proxy militia in Iraq, demonstrated the kingdom's susceptibility to drone and missile assaults. The recent targeting of the Abqaiq facility underscores this ongoing threat.
Furthermore, oil remains the lifeblood of the Saudi economy. Iran's actions have effectively closed off the Strait of Hormuz, a vital chokepoint for global energy transport. While Saudi Arabia has utilized its east-west pipeline to export oil via the Red Sea, Houthi attacks on shipping in the Bab El Mandeb strait at the southern end of the Red Sea now jeopardize these exports to Asia. A seven-year military campaign by Saudi Arabia against the Houthis in Yemen proved unsuccessful, and the kingdom now faces renewed threats from both its southern neighbor and from the north.