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Bob Seely is MP for the Isle of Wight.

Is Iran pushing up the price of oil as an act of policy – a political and economic weapon, if you like – in its proxy war against Saudi Arabia and the US?  That is one likely conclusion after the drone attacks last weekend which hit two major oil Saudi refineries.

Iran’s allies in Yemen, the Houthi, claimed that they had launched armed drones on Saturday, striking Abqaiq oil processing plant, the world’s largest, and the oilfield of Khurais. However, there seems little doubt that this attack would not have been sanctioned without Iranian support, and indeed it is almost certainly an Iranian attack on Saudi Arabia, using the Houthi as a ‘deniable’ fig leaf.

These strikes were the latest escalation in the Iran crisis. So why did this happen? Is the timing significant, and what does it tell us about Iranian foreign policy?

In May last year, Donald Trump pulled the United States out of the Iran Nuclear Deal – formally known as the Joint Comprehensive Plan of Action – whereby Iran agreed to limit its nuclear development and allow in international inspectors in return for a lifting of sanctions. European states, including the UK, remain committed to the deal, although some in our country oppose it.

New US sanctions since, targeting energy, shipping and finance, have hit the Iranian economy hard, even surprising some in the US with their effectiveness. In response, Ayatollah Ali Khamenei, Iran’s supreme leader, has decided on a course of using “pressure tools” against Washington.

Iran’s foreign policy is now simple: if we are suffering, we will find ways of making others suffer too. The Iran crisis is being internationalised.

Since the spring, the crisis has escalated. In May, Iran said it would withdraw from elements of the deal. In June, Iran seized a UK-registered tanker. There have been other attacks on US military bases in Iraq.

Lasr weekend’s drone attack is one of the most high-profile examples in recent years of what military experts call asymmetric warfare. It’s a new name for the sort of warfare which has been practiced for centuries. It’s roughly defined as warfare tactics used by the weak which target the vulnerability of the strong.

Western states are still technologically dominant. Iran cannot match our technology. It does not need to do so. It can target our weaknesses. In this case it is dependence on Saudi oil, nervousness over the world economy and the threat of an ‘oil shock’ that could tip the world into recession.

Whilst a single drone attack will not have a profound effect on oil prices, it has made markets nervous. Oil prices rose sharply on Monday – 15 per cent – returning prices to where they were in the spring. Even Monday’s one-off attack will add 20 cents to petrol prices. In the US, that will cost families an extra $18 a month at the petrol pump. It is not impossible that thus price hike will result in a political hit for Trump, with one analyst arguing that a prolonged price increase could led to Republican voters staying at home. If Iran is conducting these attacks with an eye on US politics, it will be following the malign example set by Russia, which manipulated the 2016 US Presidential elections.

The attack has also exposed the vulnerability of Saudi oil fields, which may now delay the floating of the Saudi oil giant, Aramco. The attack hit five percent of world oil production, some 5.7 million barrels a day.

Iran’s threat to destabilise oil prices may be the most powerful card it has, and it is now playing it. It may also explain the reluctance of Saudi and the US to take military action in response to what is to all intents an attack by one state on another that, without the Houthi figleaf, would expect a military response.

What next? Until the Iranian regime is changed – virtually impossible – or Iran backs down – unlikely but not impossible – or a version of the JCPOA is readopted, this crisis will worsen. Iran has proxies and allies in several countries: Syria, Iraq, Bahrain, Yemen, Lebanon and the Gaza Strip. They could be influenced to strike targets that will hurt the Western states. Iranian small boat swarms may attack, seize or sink more tankers in the Persian Gulf. There is the remote chance of Iranian-sponsored terror attacks in Western states. Iran may seize more Western hostages in its country and hold them hostage.

Mike Pompeo, the US Secretary of State, has outlined 12 US demands. Some of these are unrealistic, but there is some chance for a more modest set of US proposals being put forward that Iran could sign up to, or at least use as the basis for negotiation.

For the UK, we are aligned in military policy with the US, and with Europe in our continued support for the JCPOA. It is an increasingly difficult path to follow as the threat of overt as well as covert warfare increases. Without resolution, a more generalised crisis is only a matter of time.

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