Half of Saudi Arabia's oil production has gone offline following a surprise drone strike.
Drones attacked Abqaiq facility in Saudi Arabia and the Khurais oil field run by Saudi Aramco early Saturday morning, the kingdom's interior ministry said, sparking a massive fire at a crude processing plant essential to global oil supplies.
The closure will impact nearly 5 million barrels of crude processing per day, affecting 5 percent of the world's daily oil production. And while Aramco is confident that it can recover quickly, if it can't, however, the world could face a production shortage of as much 150MM barrels per month. An outcome which could send oil prices into the triple digits.
Supply loss from KSA may be as high as 150 MM barrels/month. Oil may hit $100.— Krishnan Viswanathan (@kxviswan123) September 14, 2019
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 can be expected in the future.
A Houthi spokesperson explained, “We promise the Saudi regime that our future operations will expand and be more painful as long as its aggression and siege continue," adding that the attack involved ten drones.
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. Related: U.S. And Russia Battle It Out Over This Huge Iraqi Gas Field
There have been no details on the severity of the damage but Agence France-Presse quoted interior ministry spokesperson Mansour al-Turki as saying that there were no human casualties as a result of the attack.
More Attacks To Come?
This latest strike highlights the risk posed by the Houthis to Saudi Arabia's oil infrastructure as tensions between the groups continues to escalate.
The growing power of the Houthis' drone operations is likely to reignite the debate on where the militant group is securing these weapons. It could very well be that the group has weaponized noncombatant drones, or in a darker scenario, they are receiving the militarized drones from Iran.
A Saudi-led coalition has been at war with the Houthi movement in Yemen since March 2015. The Iranian-backed rebels hold the funding, Sana'a, and other areas in the Arab world's most impoverished nation.
The battle has created one of the world's worst humanitarian crisis. The violence has 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 & Event Data Project, which tracks the conflict.
By Michael Kern for Oilprice.com
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