DUBAI, UNITED ARAB EMIRATES – Drones attacked the world's largest oil processing facility in Saudi Arabia and a major oil field operated by Saudi Aramco early Saturday, the kingdom's Interior Ministry said, sparking a huge fire at a processor crucial to global energy supplies. No one immediately claimed responsibility for the attacks in Buqyaq and the Khurais oil field, though Yemen's Houthi rebels previously launched drone assaults deep inside of the kingdom. It wasn't clear if there were any injuries in the attacks, nor what effect it would have on oil production in the kingdom. The attack also likely will heighten tensions further across the wider Persian Gulf amid a confrontation between the U.S. and Iran over its unraveling nuclear deal with world powers. Online videos apparently shot in Buqyaq included the sound of gunfire in the background.
Fixing the damage done by the drone attack on the Saudi oil processing plant may be the easy part. The hard part will be calming energy markets, where oil prices have jumped faster than at any time in over a decade. The attack on Saudi Arabia's Abqaiq plant, which accounts for 5 percent of global oil supplies, and a nearby facility took 5.7 million barrels a day of production off line for at least a few days. It also revealed the significant danger that drones pose to the Persian Gulf's sprawling processing plants, pipelines and refineries. "The psyche has been altered," said Tom Kloza, global head of energy analysis for Oil Price Information Service.
Saudi Arabia's state-owned oil company Saudi Aramco will continue to increase capacity for both oil and gas production, and will also expand overseas through joint ventures, CEO Amin Nasser told journalists Tuesday during a media visit to the company's headquarters in Dhahran. Recently, the company had announced plans to launch an initial public offering (IPO), which could be the biggest public listing of all time. Output capacity at the company's Shaybah oilfield is expected to go up by 33 percent, reaching 1 million barrels a day, in the next couple of weeks. The capacity expansion at Shaybah by 250,000 barrels a day is meant to compensate for decreasing output from other maturing fields, according to Reuters. The total refining capacity is planned to be increased to 8 million to 10 million barrels a day, up from the current 5.4 million barrels a day, the Wall Street Journal reported.
WASHINGTON – U.S. Secretary of State Mike Pompeo on Saturday accused Iran of leading attacks on Saudi oil plants that cut the kingdom's output roughly in half, ruling out Yemeni involvement and denouncing Tehran for false diplomacy. Yemen's Iran-aligned Houthi group claimed credit for Saturday's attacks on two plants at the heart of Saudi Arabia's oil industry, including the world's biggest petroleum processing facility. Pompeo, however, said on Twitter that there was no evidence the attacks came from Yemen. "Tehran is behind nearly 100 attacks on Saudi Arabia while Rouhani and Zarif pretend to engage in diplomacy," Pompeo said, referring to Iran's President Hassan Rouhani and Foreign Minister Mohammed Javad Zarif. "Amid all the calls for de-escalation, Iran has now launched an unprecedented attack on the world's energy supply," he added.
U.S. President Donald Trump said in a tweet on Saturday that Saudi Arabia's King Salman had agreed to his request to increase oil production "maybe up to 2,000,000 barrels" to offset a decline in supplies from Iran and Venezuela. Trump tweeted, with some of his trademark misspelling: "Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & disfunction in Iran and Venezuela, I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference ... Prices to high! He did not specify if the figure was barrels per day (bpd). During the call, the Saudi king and Trump emphasized the need to preserve oil market stability and efforts of oil-producing countries to compensate for any potential shortage, Saudi state media reported on Saturday. The statement reported by Saudi media did not mention any intention by Saudi Arabia, the world's top oil exporter, to raise production to 2 million barrels per day.