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The New Face of Energy Insecurity

Author: Blake Clayton, Adjunct Fellow for Energy
November 9, 2012
National Interest Online

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The future of energy insecurity has arrived. In August, a devastating cyber attack rocked one of the world's most powerful oil companies, Saudi Aramco, Riyadh's state-owned giant, rendering thirty thousand of its computers useless. This was no garden-variety breach. In the eyes of U.S. defense secretary Leon Panetta, it was "probably the most destructive attack that the private sector has seen to date."

What makes this kind of attack so worrying is the risk it poses to energy prices and hence the U.S. economy. Stopping oil production in Saudi Arabia could turn into a catastrophic loss of oil supplies. Even a short outage could cause prices to fly off the handle, setting off a scramble as market participants rushed to buy oil in case the shortage dragged on. Because the oil market is global in nature, a production outage anywhere can cause oil prices the world over to soar. U.S. officials should take note: A cyber threat to a company so central to the world energy market as Saudi Aramco poses a significant risk to the economic well-being of the United States.

The August attack on Saudi Aramco was only the most recent volley in what Washington has described as "low-grade cyberwar" in the Middle East, in this case likely involving Iran. The Shamoon virus the hackers deployed, judging by its sophistication and signature, was the handiwork of a state-supported effort, according to Secretary Panetta, though some U.S. investigators have disputed that assessment. Security experts surmise that the attack may have involved someone with privileged access to the company's computer network.

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