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Saudi Arabia Vows to Protect Oil Facilities After Drone...

Business Maverick

Business Maverick

Saudi Arabia Vows to Protect Oil Facilities After Drone Attack

The sun sets beyond crude oil storage tanks at Saudi Aramco's Ras Tanura oil refinery. Photographer: Simon Dawson/Bloomberg
By Bloomberg
11 Mar 2021 0

Saudi Arabia said it would guarantee global energy security and deter further attacks on its infrastructure, days after a missile and drone assault on the world’s largest oil-export terminal.

The attack on the kingdom’s Ras Tanura port on Sunday caused a brief spike in oil prices and was claimed by Iran-backed Houthi fighters in neighboring Yemen, who are battling a Saudi-led coalition. The missiles were intercepted but the incident marked a serious escalation and has further stirred regional tensions at a time when U.S. President Joe Biden is aiming to re-start nuclear diplomacy with Tehran.

Understanding the Conflicts Leading to Saudi Attacks: QuickTake

“The kingdom will take necessary and deterrent measures to protect its national resources,” Foreign Minister Prince Faisal bin Farhan said in Riyadh, alongside visiting Russian counterpart Sergei Lavrov. “The failed attempts to target the port of Ras Tanura do not only target the security of the economy and Saudi Arabia. They target the global economy and its oil supplies.”

The international community needs to take a strong stance to prevent such attacks, Prince Faisal said, blaming Iran for supplying the Houthis with ballistic weapons. Shrapnel from one projectile landed close to a residential compound for employees of Saudi Aramco, which operates Ras Tanura on the kingdom’s east coast.

Russia Oil Ties

Benchmark Brent crude has surged 75% since early November to $68 a barrel as the OPEC+ cartel restricts supplies and major economies roll out coronavirus vaccines. It briefly topped $71 on Monday in the wake of the attacks and after the alliance — comprising members of the Organization of Petroleum Exporting Countries and others including Russia and Mexico — surprised markets last week by deciding against raising output in April.

Moscow had tried earlier this year to convince Riyadh to increase production, fearing that higher prices would lead rival shale companies in the U.S. to pump more and boost their market share.

Yet Lavrov said on Wednesday that Russia and Saudi Arabia, the two de facto leaders of OPEC+, were still aligned on energy policy.

“We do not see any events that will negatively impact our will to continue cooperating,” he said. “This is the reality and it will remain so for the long-term.”

Yemen War

The Saudi coalition intervened in Yemen’s civil war on the side of the United Nations-recognized government six years ago. The UN says the conflict has caused the world’s worst humanitarian crisis.

The Houthis have claimed regular attacks on Saudi cities and ports in recent years. The Shia group said it was responsible for striking Aramco’s Abqaiq oil-processing plant and Khurais field in September 2019. Armed drones temporarily knocked out about half of Saudi Arabia’s production capacity. The UN concluded those missiles were probably of Iranian origin.

Houthis have stepped up their attacks this year. Last week, they said they bombed an air base in southwestern Saudi Arabia and hit an Aramco fuel depot in Jeddah, the kingdom’s second-biggest city. They targeted Riyadh, the capital, late last month with drones and missiles.

Extreme Restraint

Former U.S. President Donald Trump classified the Houthis as a terrorist organization last year, shortly after a number of attacks on oil tankers in the Red Sea. Biden rescinded that designation, saying it was hindering the efforts of aid workers to provide food and shelter to Yemenis living under Houthi control.

“The kingdom is committed to ending the war in Yemen through a political resolution, but on the other side of this conflict is a group driven by the extremist ideology of the Iranian regime,” Saudi Arabia’s ambassador to the U.S., Princess Reema bint Bandar, said in a statement Tuesday. “We are exercising extreme restraint in the face of a daily barrage of weaponized drones and ballistic missiles.”


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