Drone attacks on Saudi Arabia’s energy infrastructure on Saturday by Yemen’s Houthi rebels reduced oil production by 5,7m barrels a day which, according to analysts, is sufficient to trigger a hike in international prices by $5-to-$10.
According to a Yemeni Houthi rebel spokesman, Yahya Sarea, 10 drones were deployed in the attacks in the Abqaiq refinery and the Khurais oilfield. Abqaiq is Aramco’s largest oil refinery with the capacity to process 7% of the world’s global supply. Khurais is the Kingdom’s second-largest oil field, producing 1% of the global oil supply.
This is the latest attack on a string of Saudi energy infrastructure. Houthis were blamed for drone attacks on the Shaybah natural gas liquefaction facility in August and other oil facilities in May. In May, four Saudi-flagged tankers were also attacked within UAE territorial waters in the Gulf of Oman.
A rebel spokesman told the Lebanon-based al-Masirah TV on Saturday that further attacks should be expected. There were no reported casualties as a result of the attack.
The state-owned oil company ARAMCO has announced that some of the reduction in oil production will be compensated from the company’s reserves. Saudi Arabia produces 10% of the global crude oil supply.
US Secretary of State Mike Pompeo branded the drove strike as an attack to “world energy supply” and blamed Iran, suggesting the drones may not have come from Yemen at all. By Sunday evening, Iranian foreign ministry spokesman Abbas Mousavi dismissed U.S. allegations as “pointless”.
Washington is blaming Tehran for over 100 attacks in Saudi territory. Saudi Prince Mohammed bin Salman told US President Donald Trump that the kingdom will defend itself, the Saudi Press Agency (SPA) reports.
Yemen is ravaged by a prolonged civil war since 2015, in a proxy standoff between Iran-backed Houthis and the government of the Saudi-backed President Abdrabbuh Mansour Hadi.
Riyadh’s stock market opened with losses on Sunday with big losses for the petrochemical industry. The negative climate also affected Dubai and Kuwaiti capital markets. The attack could undermine the valuation of Saudi Aramco on the Tadawul bourse in Riyadh later this year but the event does not seem sufficient to delay the initial public offering.