The Saudi oil company Aramco was hit with drone strikes Saturday according to a Fox report. The drone strikes led to a fire at the world’s largest oil processing facility. That facility is near an oil field also operated by the company.
Short term damage
Roughly 5% of the world’s oil supply was disrupted. The drone strikes were carried out by Yemen’s Houthi rebels according to a CNN report. The Houthi run Al-Masirah news agency is reporting Houthis claimed responsibility. They were targeting state-owned Saudi Aramco oil facilities in Abqaiq and Khurais. The Houthis are an Iranian proxy.
The Organization of the Petroleum Exporting Countries (OPEC) estimates total Saudi production of oil currently was at 9.8 million barrels per day. Five million barrels of crude production are impacted as a result of the fire. That cuts the Saudi revenue stream by about half. Officials believe they will be able to restore its normal production schedule on Monday.
Spat in the oil patch
Fox News reports: The oil fields have come under attack before by militants. Al Qaeda claimed suicide bombers tried but failed to attack the oil complex in February 2006.
The U.S. Embassy in Riyadh said it was unaware of any injuries to Americans. Saudi Aramco employs a number of U.S. citizens. Some of them live in guarded compounds in the kingdom near the site. The timing likely correlates with an upcoming ARAMCO IPO.
Saudi U.S. Alliance
“These attacks against critical infrastructure endanger civilians, are unacceptable, and sooner or later will result in innocent lives being lost,” U.S. Ambassador John Abizaid, a former Army general, said.
The Wall Street Journal reports, President Trump called Crown Prince Mohammed bin Salma. The reporting is that the President Trump is ready and willing to “cooperate with the kingdom in supporting its security and stability.” The Crown Prince says Saudi Arabia “is willing and able to confront and deal with this terrorist aggression.”
U.N. and Iran
The schedule shows United Nations’ General Assembly will meet a few days from now. President Trump has made it known that he wanted to meet with Iranian President Hassan Rouhani to defuse tensions. Rouhani refuses to meet with Trump until lifting of sanctions takes place. We shall soon see what or if the Iranian proxy damages Saudi oil production may have.