‘Saudis don’t want open Iran conflict’
Mohammed bin Salman has said the kingdom is “willing and able” to respond to this “terrorist aggression”.
But a tit-for-tat strike on Iranian oil fields is “highly unlikely”, Middle East expert James Dorsey said.
“The Saudis do not want an open conf lict wit h Iran. The Saudis would l i ke ot hers to f ight t hat war, and t he ot hers a re relucta nt,” sa id Dorsey, f r om t he S . R a ja r a t n a m S c h o o l o f I n t e r n a t i o n a l Studies in Singapore.
Oil prices soared by 10 per cent in early Asia trading on Monday, while Saudi Arabia focused on restoring production at the plants.
Saturday’s explosions set off fires that engulfed the Abqaiq plant, the world’s largest oil processing facility, and nearby Khurais, which hosts a massive oil field.
Saudi’s energy infrastructure has been hit by the Huthis many times before, but this strike was of a different order, abruptly halting 5.7 million barrels per day (BPD) or about six per cent of the world’s oil supply.
“The genie is out of the bottle,” said Bill Farren-Price, director of the London-based RS Energy Group.
“It is now clear that Saudi and other Gulf oil facilities are vulnerable to this kind of attack, which means that the geopolitical risk premium for oil needs to rise.”
No casualties were reported but the full extent of the damage was not clear.
Aramco also said it will dip into its reserves to offset the disruption. On Saturday, CEO Amin Nasser said that “work is underway” to restore production, but the incident could affect investor confidence ahead of Aramco’s stock market debut.
A significant volume of oil production can be restored within days but the company would need weeks to reach full output again, Bloomberg News re por t e d Sunday, c i t i ng unnamed sources.
Trump tweeted that he had “authorized the release of oil from the Strategic Petroleum Reserve, if needed, in a to-bedetermined amount” that is “sufficient to keep the markets well-supplied”.
T h e p r e s i d e n t a l s o “i n for med a l l appropr iate agencies to expedite approva ls of t he oi l pipel i nes currently in the permitting proce s s i n Tex a s a nd v a r iou s ot her States,” wit hout naming specif ic projects.
Following a phone call between Trump and Prince Mohammed, the White House condemned the attacks on “infrastructure vital to the global economy”.
Tehran and Washington have been at loggerheads since May last year when Trump pulled the US out of a landmark 2015 deal with world powers that promised Iran relief from sanctions in return for curbs on its nuclear program.
Despite the US accusation, theWhite House said on Sunday Trump may still meet his Iranian counterpart Hassan Rouhani at the upcoming UN assembly.
Saudi Arabia has spent billions on military hardware but recent events have underscored the vulnerability of its infrastructure to attack.
The Huthis have staged repeated cross-border missile and drone attacks targeting Saudi air bases and other facilities in what they say is retaliation for the Riyadh-led bombing campaign on rebel-held areas in Yemen.