Oil prices have found their way up the ladder while world stock numbers are sliding down, as news of the attack on crude oil facilities in Saudi Arabia’s largest company Aramco, south of Riyadh has been confirmed. Yemen’s Houthi militia has taken responsibility of hitting the facility with a drone that has pushed back world supply by months.
Two sources briefed on the company’s operations spoke to the media and confirmed that “Saudi Aramco’s full return to normal oil production volumes may take months after attacks on Saudi oil plants knocked out more than half of the country’s output. It is still bad,”
Currently, about 5% of the world’s supply is shut down and half of Saudi’s oil output flow has been affected. The attacks have put the world economy in another tizzy, while it is still recovering from the news of a slowdown in the world’s second-largest economy China, due to the ongoing trade war with the US.
As Iran backed Houthis have claimed responsibility, on his part Trump speaks for the US and said that they are “ready and loaded” to respond back.
A 30 percent surge is confirmed in the crude prices. This news is coming at a time when American, European and Asian central banks are already trying to manage the pressure on their respective economies due to the general slowdown. For them, to ease their monetary policy seemed like the best option.
The attacks have said to have hit two major facilities on Aramco- Hijra Khurais and Abqaiq. While the first one is one of Saudi Arabia’s largest oil fields, which produces about 1.5 million barrels a day, the second one is the world’s biggest crude stabilization facility, which processes seven million barrels of Saudi oil a day, about 8% of the world’s total. There were no injuries reported.
The attack ironically falls just a little before the UN General Assembly meeting where Trump is reportedly planning to converse with Tehran over a peaceful reconciliation. Also, the attack has sadly put Aramco’s upcoming IPO is bad light, as much as it affects the change of guard.
Political analysts feel that it is too early to pin the blame on Houthis as in a previous instance, the same was proven wrong when connections to similar drone attacks were found originating from Iran backed militia functioning in Iraq. Drones are becoming a more sophisticated method of attacking facilities and most have been designed to work on high and low altitudes and can also be fired in the night. Houthis have been using state-of-the-art drones which are suspected supplied to them by Iran.