Yemeni Shiite Houthi rebels have reportedly fired missiles targeting Saudi Aramco, allegedly damaging the oil giant’s facilities in southwestern Saudi Arabia on Friday, according to local Houthi-affiliated media, with no confirmation from Saudi officials or Aramco itself.
Yemen is the site of a proxy war between Saudi Arabia and Iran, and Iranian media were the first to report on the Houthi claims coming out of Yemen.
In February 2015, the Houthi rebels forced President Abd-Rabbu Mansour Hadi to flee to Saudi Arabia, Yemen’s neighbor to the north. The Shi’ite Houthis are allied with Iran, Saudi Arabia’s regional archrival. The international community recognizes Hadi as Yemen’s legitimate leader.
Since March 2015, the Houthi rebels and loyalists to Hadi have been fighting a civil war in Yemen and forces in a Saudi-led Arab coalition are trying to restore Hadi to power.
Yemen’s geographical position is strategic because it sits on the narrow Bab al-Mandab strait connecting the Red Sea with the Gulf of Aden--a waterway for much of the oil shipments in the region.
The Houthi claims of an attack against Aramco facilities come just day after U.S. Secretary of State John Kerry met with Saudi Arabia’s King to discuss the conflict in Yemen.
The U.S. has backed the Saudi-led coalition with arms sales worth billions of dollars and with logistic and intelligence support.
Aramco, as the Saudi Arabian Oil Co is known, is the world’s most valuable company, according to Bloomberg, and is worth more than US$2 trillion. The Saudi government is planning to sell 5 percent in Aramco in an initial public offering (IPO) in 2017 and reap US$100 billion from the sale.
Last week, Saudi Arabia’s Capital Market Authority (CMA) issued new rules allowing foreign investors to buy shares directly in IPOs. The new regulations are expected to take effect on January 1, 2017, and will allow foreign investors to bid in the book-building process. Prior to this new rule, non-Saudi institutions could purchase IPOs only on a case-by-case basis, although they could make indirect purchases such as using local IPO funds.
By Tsvetana Paraskova for Oilprice.com
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