Iranian Computer Attack on Saudi Arabian Oil Company Demonstrates Vulnerability of the Global Oil Market
U.S. Strategic Interest Includes Reducing Oil Usage. It’s Cleaner and Patriotic!
On August 15, Iranian computer hackers were successful in infiltrating the computer system of Saudi Arabia’s state-owned oil company Saudi Aramco. The attack was alarming and should have Americans taking note, as Aramco is the producer of 11 million barrels per day, or approximately 13% of the world’s oil output.
Whether in retaliation for the successful “Stuxnet” computer virus attack on its nuclear facilities, or to demonstrate its ability to strike its regional foes (Iran and Saudi Arabia are rivals for dominance of the Persian/Arabian Gulf, and for influence in the Muslim world) and their allies (principally the U.S.), Iran put a justifiable scare into both commodity and national security watchers alike. Iran has not taken responsibility for the attack, but Secretary of Defense Leon Panetta , as well as independent computer security experts have gone on record as saying that the attack bears the signature of Iranian code writers.
This attack resonates with Sustainable America’s mission to reduce our nation’s oil usage. The reduction of oil usage defends against the commodity price spikes of the global oil market and reduces the both the potential for physical oil shortages in a global oil system that operates on a perilously thin margin for error (crude oil consumption runs at 97% of capacity, according to several estimates) and disruption by forces working to undermine our stability. To counter these threats, the Department of Defense, U.S. Navy and U.S. Air Force are experimenting with several alternative energy solutions, including advanced biofuels, in order to reduce their reliance on foreign oil from potentially unstable markets.
So what’s the future of energy look like for the U.S.? Oil will likely always fill a place in our economy at some level. But as global oil markets remain tight and volatile, even the recent increases in domestic oil production trumpeted by both political parties won’t be enough to stem the rise of gasoline prices that so many Americans are concerned about, as the oil that gasoline is derived from is priced on a global market. We covered this in our recent post on the future of oil in Iraq and the volatile nature of global oil markets. What’s more, although recent forecasts by the IEA and others show the U.S. becoming a net exporter by 2020, we’re still several years away from producing more oil than we consume, and thus remain vulnerable to external disruptions. To achieve true energy independence and mitigate the strategic risks to our economy, we’ve got to use less oil, and a wider array of domestically produced energy in its place. Whether it means using more natural gas or advanced biofuels, adopting more sustainable practices such as driving electric vehicles, or simply conserving oil when possible, using oil alternatives here at home isn’t just greener – it’s patriotic and a strategic necessity.
Gray Peckham is the Program Manager for Entrepreneurial Initiatives at Sustainable America, and has more than 12 years of experience analyzing the energy sector from a variety of viewpoints, ranging from strategic to financial. Gray’s professional experience has taken him from analyzing the effects of geopolitical risk on oil markets and oil companies at independent research firm John S. Herold, to a six year run on Wall Street as both an associate and as a publishing equity and credit analyst covering the oil sector. Along the way, Gray earned several SEC/FINRA professional designations (Series 7, 63, 86, 87), started his own consultancy, and became an advisory board member of the Water Innovations Alliance. Gray earned a BA from Boston College, an MA in history from Yale University (focused on U.S. foreign relations) , and serves as an Officer in the U.S. Navy Reserve.