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Drone Strikes On Saudi Oil Facilities Leave Supply Market at Risk

The most targeted location of Saudi Arabia, its oil infrastructure was attacked yet again, early on Saturday. In a drone strike, two oil facilities of the Kingdom were turned into flames. Saudi’s interior ministry confirmed that Aramco’s facility at Abqaiq in the Eastern Province and at the Hijra Khurais oil field were attacked by multiple drones.

On Sunday, it was reported that the strikes have disrupted nearly half of Saudi’s oil capacity, or 5 per cent of the daily global oil supply. The Kingdom’s Energy Minister Prince Abdulaziz bin Salman stated that 5.7 million barrels per day of crude oil and gas production have been affected.

He said that the “company is currently working to recover the lost quantities” of oil and will further provide the updates in next two days. “These attacks are not only aimed at the vital installations of the kingdom, but also on the global oil supply and its security, and thus pose a threat to the global economy,” said Abdulaziz.

The world’s largest oil exporter, Saudi produces nearly 10 per cent of the total global supply of 100 million barrels a day. The August 2019 OPEC figures put the Arab country’s total oil production at 9.8 million barrels per day.

The Saturday attacks that caused huge fire at petroleum assets of Saudi vital to global energy supplies, were under investigation and the ministry said that the fires were under control.

A military spokesman for the Houthi rebels fighting in Yemen claimed responsibilty for the attacks. On Saturday, Yahia Sarie made the announcement in a televised address carried by the Houthi-run Al-Masirah news channel.

According to his statement, the rebel group had sent 10 drones to attack the two oil processing facilities. On behalf of the Houthis, he stated that they would leave no chance to make the attacks worse, if the Yemen war continued. “The only option for the Saudi government is to stop attacking us,” he said.

Saudi Arabia and a significant partner of the coalition, the United Arab Emirates, have been at war with the rebels since March 2015. The Arab alliance group has led to the worst humanitarian crisis in its conflict in Yemen.

The drone strike on Saturday came as another retaliatory attack by the Iranian-allied rebels in Yemen. It reportedly took place at around 3 a.m., where residents near the Aramco compound in Abqaiq were able to hear multiple explosions. One of the company’s executive reported that the city had been evacuated, where a large community of Americans and westerners were residing.

Sound of gunfire could be heard in the background of online videos of the incident shot in Abqaiq. Huge clouds of smoke were seen rising over the skyline and flames were also visible in the distance at the oil processing facility. There were no reports on the casualties or any injuries during the attack.

In the recent months, Saudi Arabia’s oil infrastructure has been a major target. Beginning from its oil tankers to its oil pipelines, other such assets have also come under attacks, amidst the ongoing regional crisis with neighbouring Iran. Moreover, the Houthis have lately been launching drones and missiles on several civilian installations in Saudi, including airports.

Saudi’s closest ally, the United States directly blamed Iran for the strikes. The US State of Secretary Mike Pompeo stated that the unprecedented attack on world’s energy supplier was conducted in coordination with the Islamic Republic. Although the Houthis claimed responsibility, Pompeo stated that there was no evidence that the strikes came from Yemen.

In a tweet the State Secretary wrote that Iran was not concerned about diplomacy, adding that the US and its allies will “ensure that energy markets remain well supplied”.

The International Energy Agency (IEA) was monitoring the situation in Saudi Arabia. It said, “We are in contact with Saudi authorities as well as major producer and consumer nations. For now, markets are well supplied with ample commercial stocks.”

Saudi Aramco’s Abqaiq facility is claimed to the largest crude oil stabilisation plant in the world, which produced up to 7 million barrels of crude per day. The attack is one of the most severe act that the rivals, be it Houthis or Iran, have taken against the Kingdom, as Aramco plans to go public. It remains unclear whether Saudi will retaliate or will oblige to the demands of the Houthis. The decision would be crucial, as the rebels have been bestowing their aggression on the Kingdom, directly.

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