Simon Henderson writes: Saudi crude oil is reported to be flowing again through the Bahrain pipeline damaged by an explosion late on November 10. No one was injured in the blast, which sent a plume of flames high into the sky, damaging cars and nearby buildings. As yet, there has been no claim of responsibility, although the Bahraini government has described the incident as an “intentional act of sabotage,” blaming terrorists acting under instruction from Iran. For its part, Iran has denied any involvement.

Although oil was discovered in Bahrain before it was ever found in Saudi Arabia, the island’s actual reserves are very small. The pipeline affected, meanwhile, runs from the Saudi offshore Abu Safa oil field via a circuitous route across the Saudi mainland. Revenues from the field’s production are an important subsidy to Bahrain’s budget. The crude is refined at Bahrain’s refinery at Sitra, on the east coast of the island.

One oil industry publication suggested, “It is more likely than not that Iran chose [the attack] as a plausibly deniable response to Saudi Arabia’s perceived recent escalation against Iranian influence in Lebanon.”

The explosion occurred at Buri, a Shia town where the pipeline runs exposed on the surface rather than being underground. Buri, along with other Shia towns and villages, is off-limits to U.S. diplomatic and naval personnel based on the island, according to a map on the website of the U.S. embassy in the capital, Manama. [Continue reading…]