War in Gulf: Potential Graveyard of Global Economies

War in Gulf: Potential Graveyard of Global Economies

Tue, 10/01/2019 - 17:40
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By Brig Narender Kumar

The modern world is changing rapidly with the development of new technologies constantly emerging and revolutionising approaches to various tasks[i]and modern wars. Drones are being used to drop explosive payloads, deliver harmful substances and conduct reconnaissance[ii]. Drones are set to change the contours of national security. The Houthi rebels carried out an audacious "large-scale" attack with drones targeting Saudi Aramco oil facilities in Abqaiq and Khurais[iii]that disrupted 50 per cent of Saudi oil export and approximately five per cent of global export. Wim Zwijnenburg said, “The drones used by Houthi may have cost them just about $15,000 or less to build”[iv]but the losses these attacks caused are in billions of dollars. 

There are allegations that Iran may have assisted Houthi rebels to acquire sophisticated drone technology and experts believe that these attacks are going to be more lethal in the years ahead if the war in Yemen does not end. The drone war has the potential to escalate into a regional conflict that could pull global powers in the regional contest. Should this war escalate and become a state on state war, it will disrupt economic growth and may lead to irreversible economic losses globally.

Arab nations export approximately 63 per cent oil to the global community. An estimated 20 per cent of the global oil supply passes through Strait of Hormuz and 4.8 per cent oil passes through Strait of Bab el-Mandab. Both these straits will become part of the battlespace and likely to become no go areas during the war. 

Any conflict that may erupt in West Asia between Iran and Saudi Arabia would automatically drag the US and other West Asian nations in the conflict. Even if Kuwait, Qatar, Bahrain, Oman and Iraq remains out of the conflict, yet oil and gas production and export from these countries will be severely impacted. The oil fields, oil processing facilities, oil pipelines, SLOCs and oil tankers would be targeted by both sides. 

An estimated 60 per cent of oil supply is likely to be disrupted, as a result, the cost of crude oil may rise to unprecedented levels. Such a situation could lead to disruption in international trade, industrial growth and collapse of economies across the globe. The war is neither an option nor desirable to deal with the drone attacks by Houthi rebels. The war in the Gulf may become a graveyard of global economies that could further lead to an economic recession, loss of jobs and could destabilise many fragile states. 

Countries with fragile economies and weak industrial base could face economic failure that may trigger irreversible political and economic instability. Moreover, there is no alternative to the current dependence on oil from the Gulf.

Redesigning Strategy to Deal with Drone Threat

The question is, will confrontation between the US - Saudi alliance against Iran deter or end drone attacks? Even if the US and Saudi Arabia employ overwhelming conventional military power to deter and punish Iran and Houthi rebels, drone attacks are unlikely to cease, rather drone attacks will further intensify the hybrid war that could drag for decades. There are limits of military power[v]especially while dealing with asymmetric and irregular forces. Employment of conventional military power will result in an indecisive, inconclusive war where the scales of victory or end state is difficult to determine. The US and its Arabian allies must keep in view that, “War prosecution is always a hybrid of political and military activities, and war endings are typically messy, drawn-out, and often as uncertain.”[vi]The losses of conventionally superior military force may be disproportionate to the desired end state. Moreover, semi-autonomous non-state organisations are difficult to control even by their sponsors, because there is always a danger of these organisations spiralling out of control if their interests appear to be clashing. The outcome of this war at best would be a ‘Pyrrhic victory’ with greater loses and little gains. This is part of the proxy war between Iran and Saudi Arabia. The proxy war between two arch-rivals is being fought in Syria, Yemen, Bahrain, Iraq and spilling over to Afghanistan and even in Khorasan. Certain possible options to manage this conflict are as under:-

  • Employment of smart strategy with smart technology.
  • The global community at this stage must not take sides and must use international pressure to prevent escalation of the conflict. This conflict has the potential of unleashing disproportionate violence that may be disastrous for the global economies.
  • Political intervention by regional neighbours to keep this war below the threshold of armed conflict.
  • Conflict management by engagement and consensus among the main stakeholders. 
  • There is also a need to look at this conflict from a humanitarian point of view as well. Why should people and the nations lose future?

Lessons for India 

In case of conflict escalation, India will be facing two important challenges that would require careful handling. First obviously is energy security. India cannot afford any disruption in oil supply because that would seriously impact the economy. Second, India has almost six million Indian diasporas in West Asia. The challenge will be their safety, evacuation from West Asia and their rehabilitation. It is not possible to evacuate six million people in a couple of weeks, it will require months and evacuation from a war zone is not an easy task. Also at a time when economic growth is sluggish and employment generation is low, rehabilitation of such a large force will be near impossible. 

The looming threat of war in the Gulf must not be looked at from an economic point of view only; it has implications of national security. Any successful terror strike becomes a benchmark for other terror groups to emulate. Transfer and misuse of technology by terror organisation are not difficult thus it adds up to security burden and the state gets into a loop of putting in place defensive and offensive measures to defeat such threats. 

Moreover, no nation can provide an ‘Iron Dome’ to defend against such threats. Notwithstanding the above, this is a war of technology and must be fought by smart use of technology. Layered surveillance, layered air defence and layered intelligence are an essential component to fight this war. Neutralisation of drones would necessitate hard and soft kill of drones. One of the potent weapons that may prove to be more accurate and effective is laser weapon system to destroy drones at medium and short ranges. Use of missiles may be too expensive especially to defeat a swarm drone attack. 

There are chances of accidental war in the Gulf. There is no denying the fact that it is a war of technology and must be handled by employing smart technology. Therefore, the Organisation of Islamic Countries (OIC) must act as a guarantor to prevent a conventional war among the member nations. It needs to be understood that non-state actors do not always act rationally and could take actions that could lead to a war resulting in a humanitarian disaster. 

*Author is a Distinguished Fellow, Centre For Strategic Studies and Simulation, United Service Institution of India 


  [i] Alexander Solodov, Adam Williams, Sara Al Hanaei & Braden Goddard, Analyzing the Threat of Unmanned Aerial Vehicles(UAV) to Nuclear Facilities, Accessed from https://www.osti.gov/pages/servlets/purl/1356834 on September 2019

[ii] W.J. Hennigan, Experts Say Drones Pose a National Security Threat — and We Aren’t Ready, Time, May 18, 2018. 

[iii] Nada Altaher, Jennifer Hauser and Ivana Kottasová, Yemen's Houthi rebels claim a 'large-scale' drone attack on Saudi oil facilities, https://edition.cnn.com/2019/09/14/middleeast/yemen-houthi-rebels-drone-attacks-saudi-aramco-intl/index.html September 15, 2019.

[iv] Ben Hubbard, Palko Karasz and Stanley Reed, Two Major Saudi Oil Installations Hit by Drone Strike, and U.S. Blames Iran, The New York Times, September 14, 2019. 

[v] Rob D Wizk, The Limits of Military Power, Accessed from https://mitpress-request.mit.edu/sites/default/files/titles/content/9780262621793_sch_0001.pdf on September 29, 2019.

[vi] See Ikle, Fred Charles, Every War Must End, New York, NY: Columbia University Press, 1971 (2005);

Connable, Ben, and Martin Libicki, How Insurgencies End, MG-965, Santa Monica, Calif: RAND Corporation,2010; and Rose, 2010.