Saudi Arabia’s oil production and exports have been disrupted after drone attacks on two of Saudi Aramco’s plants, including its oil processing facility was reported. This according to market experts could impact global oil prices.
According to Reuters, sources familiar with the development said the attacks have impacted about five million barrels per day of oil production by Saudi Arabia. This volume, it stated was almost half of the kingdom’s current output.
It added that Saudi Aramco operates the world’s largest oil processing facility and crude oil stabilization plant in the world at Abqaiq, in eastern Saudi Arabia, and the plant has a crude oil processing capacity of more than seven million barrels per day (mbd).
Further reports from Oilprice.com explained that the kingdom’s interior ministry confirmed the drones attacked Abqaiq facility and the Khurais oil field, sparking a massive fire at the crude processing plant which is essential to global oil supplies.
It noted that the closure will impact about five per cent of the world’s daily oil production, adding that while Aramco was confident that it can recover quickly, the world could face a production shortage of as much 150 million barrels of oil per month.
This, according to oilprice.com could send oil prices into the triple digits, and possibly hitting $100 per barrel.
Accordingly, the Houthi rebels, who are backed by Iran in a yearlong Saudi-led battle in Yemen, have apparently asserted responsibility for the strikes and pledged that more assaults should be expected in the future.
A Saudi-led coalition has been at war with the Houthi movement in Yemen since March 2015. The battle has created one of the world’s worst humanitarian crisis.
The violence has also pressed Yemeni citizens to the brink of starvation. And the death toll has soared to more than 90,000 individuals since 2015, according to the US-based Armed Conflict Location and Event Data Project, which tracks the conflict.
However, Oilprice.com quoted a Houthi spokesperson to have explained that: “We promise the Saudi regime that our future operations will expand and be more painful as long as its aggression and siege continue.”
It said the Iran-backed Houthis have recently been behind a number of assaults on Saudi pipelines, vessels and other energy infrastructure as tensions grow in the region.
Further, Agence France-Presse (AFP) quoted Saudi’s interior ministry spokesperson, Mansour al-Turki, to have said that there were no human casualties as a result of the attack.
It equally explained that this latest strike highlighted the risk posed by the Houthis to Saudi Arabia’s oil infrastructure as tensions between the groups continues to escalate.
According to reports, the growing power of the Houthis’ drone operations is likely to reignite the debate on where the militant group is securing the weapons.
Recently, Nigeria and Saudi Arabia who are key members of the Organisation of Petroleum Exporting Countries (OPEC), pledged to cut back their oil production levels in compliance with the production limitation agreement they signed with non-OPEC member countries led by the Russian Federation, to stabilise oil prices.
Source: THISDAY
