What Will Be the Fallout From Strikes on Saudi Arabia's Oil Infrastructure?
Here are a dozen things everyone should know about the past weekend’s strikes on a major Saudi oil refinery, and the likely fallout from them:
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- The Houthis, a rebel army fighting against Saudi-led interests in Yemen, claimed credit for launching the attacks on Saturday. However, the U.S. government now says it believes the assault was launched from Iran, and that it may have involved cruise missiles rather than drones.
- The strikes centered on Saudi Arabia’s Abqaiq facility. Abqaiq is the world’s largest crude processing facility, processing about two-thirds of the total Saudi supply each day. Saudi Arabia is the world’s second-largest producer of crude oil behind the United States.
- Several large Saudi oil fields were also attacked. Those attacks, along with the disruption of the Abqaiq facility required the Saudi government to shut-in about half of its current production, or about 5.7 million barrels of oil per day.
- According to the U.S. Energy Information Administration (EIA), that amounts to the single biggest sudden disruption on record, more than the loss of Kuwaiti and Iraqi supply during the Gulf War in August 1990, and the 1979 decrease in Iranian output following the Islamic Revolution.
- Crude prices spiked 10% in early Monday trading, and could rise further if the supply disruption lingers beyond a few days.