Energy dept 'closely monitoring' fallout from Saudi attack

Daniel Fowler
September 16, 2019

Given the sheer size of the facility, a prolonged outage could add significant risk premium to the oil market and potentially jolt energy markets in the near term.

Later in the day, the spokesman for Yemeni Armed Forces said the country's military sent a squad of drones hundreds of kilometers into the heart of Saudi Arabia to carry out coordinated attacks on two of the country's vital energy sites.

Locsin gave the statement after strikes hit Saudi Arabia, at Saudi Aramco's oil processing facilities in Abqaiq, as well as their oil field in Khurai.

Although Trump did not specify who is behind the attack, USA officials believe Iran coordinated the strikes, according to Reuters.

Is the possibility of a war between Iran and the Saudis increasing?

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The full extent of the damage was not clear nor the type of weapons used, and reporters were kept away from the plants amid beefed-up security. "It comes only a week after Saudi Arabia's appointment of Prince Abdulaziz bin Salman as Energy Minister and shortly after news of a restart in initial public offering of Aramco". Brent crude futures, the global oil benchmark, jumped 9.86 per cent to Dollars 66.16 per barrel on Monday.

Saudi Arabia has spent billions on military hardware but recent events have underscored its infrastructure's vulnerability to attack.

While its oil wells, scattered over a vast geographical area, may be a hard target, its various oil processing facilities are vulnerable to potential rebel strikes.

In recent months, the Houthis 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.

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