Shipbuilders may bag more orders after Saudi attack

Korean shipbuilders may receive more orders following drone strikes on Saudi Arabia’s crude processing facilities, analysts here said Tuesday, as the incident is likely to push up demand for liquefied natural gas (LNG) tankers and offshore facilities.

Saudi Arabia shut down about half of its oil production Saturday following a series of drone attacks that damaged two key oil installations.

It said that the closure will affect 5.7 million barrels of crude production a day, about 5 percent of the world’s daily oil production.

Global oil prices surged following the news. Brent crude futures closed at $69.02 per barrel on Monday, up 14.6 percent from the previous session, its biggest jump since 1988.

The West Texas Intermediate (WTI) for October delivery increased 14.7 percent to settle at $62.90 a barrel on the New York Mercantile Exchange, its largest daily gain since 2008.

The crude price hike could prod those in the energy industry to turn their eyes to LNG, which is considered an alternative to conventional fuels, according to analysts. Demand for LNG from the United States could increase because of its price stability and supply flexibility.

“The price of the Middle East-origin LNG follows that of crude, but the price of U.S. LNG exports doesn’t,” Yang Hyung-mo, an analyst at eBest Investment Securities, said in his report.

“Thus, it will lead to more investments into North American LNG market and more LNG carrier orders.”