Saudi Arabia weighs deterrence against de-escalation as Iran conflict threatens economy
Riyadh initially sought to remain on the sidelines after fighting between the United States, Israel and Iran began on 28 February, but has shifted its approach following attacks by Iranian-backed groups
Saudi Arabia is weighing whether to intensify military action or pursue de-escalation as the conflict between the United States and Iran raises security risks and threatens the Kingdom's economic ambitions.
Riyadh initially sought to remain on the sidelines after fighting between the United States, Israel and Iran began on 28 February, but has shifted its approach following attacks by Iranian-backed groups, says the BBC.
This week, Saudi Arabia carried out joint strikes with the United States against Iraq's Popular Mobilization Forces, a paramilitary group that Saudi officials believe was responsible for multiple drone attacks on the Kingdom.
Keep updated, follow The Business Standard's Google news channel
The conflict has exposed Saudi Arabia to growing security threats from Iranian-backed groups operating to its north and south, raising concerns over the safety of critical infrastructure and the future of Crown Prince Mohammed bin Salman's Vision 2030 programme.
Vision 2030 aims to reduce the Kingdom's reliance on oil revenues by expanding other sectors of the economy and attracting foreign investment.
"Saudi Arabia is facing a difficult dilemma. Ever since the US and Israel launched their war on Iran on 28 February, the Saudis have largely tried to stay out of it," BBC Security Correspondent Frank Gardner said.
Gardner said the conflict posed a challenge to the Kingdom's long-term economic plans.
"His aim is to diversify the Kingdom away from its dependence on oil revenues and create vibrant, modern, domestic industries..." Gardner said, referring to Crown Prince Mohammed bin Salman.
Saudi Arabia's energy infrastructure has remained vulnerable to attacks. The Abqaiq oil processing facility, which was heavily damaged in a 2019 strike that temporarily disrupted about half of the country's oil exports, was recently targeted again by drones launched from Iraq.
"That attack [in 2019] knocked half of Saudi oil exports offline for several days and it was a wake-up call to Riyadh as to just how vulnerable its critical national infrastructure is to attack," Gardner said.
The conflict has also disrupted Saudi oil export routes. After Iran effectively closed the Strait of Hormuz, Saudi Arabia sought to redirect exports through its Red Sea port of Yanbu. However, that route has also come under pressure as Houthi forces have stepped up attacks on shipping in the Red Sea, threatening the Kingdom's ability to export oil to Asian markets.
Saudi Arabia has previously led a years-long military campaign against the Houthis in Yemen.
"Saudi Arabia spent seven years trying to bomb the Houthis into submission and failed," Gardner said.
The Kingdom now faces a choice between responding militarily to deter further attacks or seeking to reduce tensions through other means.
"For Saudi Arabia the dilemma now is whether to keep on hitting back as a deterrent, or whether to try to de-escalate the situation, perhaps by paying off some of their adversaries," Gardner said.
