Saudi’s Aramco is reportedly shutting down half of its oil production after drone attacks that targeted the world’s largest oil processing facility in the country.
The shutdown will affect almost five million barrels of crude oil produced per day. This is about 5% of the world’s daily oil production.
The drone attacks targeted the Abqaiq oil processing facility in Buqyaq and the Khurais oilfield operated by Saudi Aramco early Saturday.
The Abqaiq oil processing facility is known as “the largest crude oil stabilization plant in the world.” It is located in Buqyaq is located in the kingdom’s Eastern Province and is about 330 kilometers northeast of the Saudi Arabian capital, Riyadh.
It processes sour crude oil, turning it into sweet crude. It is estimated that the facility can process up to 7 million barrels of crude oil a day. Once the crude oil has been processed, it is transported to transshipment points on the Red Sea and the Persian Gulf.
According to Saudi’s Aramco, the Khurais oil field is said to produce over a million barrels of crude oil per day. The oilfield is said to have estimated reserves of over 20 billion barrels of oil.
There has been no confirmation if there are any injuries in the attacks. The attack will most likely intensify the tension and volatile mood across the Persian Gulf. The attack comes at a time when Iran has been accused of breaching the new nuclear limit.
When news of the drone attack broke, no one claimed responsibility for the attacks immediately. However, authorities suspected Yemen’s Houthi rebels.
The attacks on Saturday is not the first time that the plant has been targeted by militants. In February 2006, Al-Qaida suicide bombers tried but failed to attack Saudi’s Aramco oil facility.
The suspicions on Houthi rebels were confirmed after the group claimed the attacks through the Al-Masirah news agency . The rebel group said 10 drones were deployed in the attacks.
“We promise the Saudi regime that our future operations will expand and be more painful as long as its aggression and siege continues,” a Houthi spokesman said.
The envoy of the United States to Saudia Arabia has condemned Saturday’s attacks. Ambassador John Abizaid said: “These attacks against critical infrastructure endanger civilians, are unacceptable, and sooner or later will result in innocent lives being lost.”
The attacks on Aramco’s facilities could affect its plans of taking the company public. According to the CEO of Aramco, Amin Nasser, the company is ready to list on the Saudi stock exchange very soon.
However, he did not disclose how much of the company would be listed on the Tadawul exchange. He also did not give any details regarding Aramco’s plan to list in an international stock exchange.
Aramco’s IPO is seen as a major part of Crown Prince Mohammed bin Salman’s Vision 2030 plan. This is a plan to transform the economy of Saudi Arabia, making it less dependent on fossil fuels, in the future.
The world’s most profitable oil company, Aramco, is said to be valued at more than $1.5 trillion.
Since March 2015, a Saudi-led coalition has been at war with the rebels. The Houthis are backed by the Iranians and they hold the Yemeni capital of Sanaa. They also hold other territories in the poorest country in the Arab world, Yemen.
The war has been tagged as the worst humanitarian crisis in the world. Since it started in 2015, 90,000 have been killed. The conflict has also put Yemen under a state of famine.
Since the war started, the Houthi rebels have been known to use drones in their attacks. Iran has been accused of supporting the Houthi rebels. Iran has denied the allegations of supplying the rebels with weapons.
In a 2018 report by a United Nations panel, they found out that the Qatef-1 drone the Houthis claim they have made is very identical to a drone manufactured by the Iran Aircraft Manufacturing Industries called Ababil-T. The Qatef-1 is said to be similar in dimensions, design, and capability.
Over the past few years, the Houthis have been behind a series of attacks against Saudi Arabia’s pipelines, tankers, and other infrastructures. In May of this year, the Houthis attacked Saudi’s East-West Pipeline amid the growing tension between the United States and Iran.