IEA says oil markets ‘well supplied’ after attack on Saudi Aramco

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The International Energy Agency (IEA) said on Saturday it is closely monitoring the situation in Saudi Arabia following drone attacks on two of Saudi Aramco’s oil facilities in the Kingdom’s Eastern Province.

The international energy watchdog said that “for now, markets are well supplied with ample commercial stocks.”

"We are in contact with Saudi authorities as well as major producer and consumer nations," the IEA said in a statement.

Saudi Arabia’s Ministry of Interior said on Saturday that drone attacks caused fires at two of Saudi Aramco’s oil facilities during dawn. The fires were brought under control.

One of the facilities is located in Abqaiq, near Dammam in the Kingdom's Eastern Province. The other is in the Hijrat Khurais oilfield.

Abqaiq is an Aramco-run gated residential community that includes oil-processing facilities.

Meanwhile, Yemen’s Houthi militia claimed responsibility for the attacks, the militia’s military spokesperson said on Yemeni Al Masirah TV.

The Iran-backed militia has in the past launched several attacks on the Kingdom’s airports and oil facilities.

US Secretary of State Mike Pompeo said on Saturday that there is no evidence that the attack on Saudi Arabia's oil facilities originated from Yemen, and that Iran is responsible for this "unprecedented attack" on global energy supply.

"The United States will work with our partners and allies to ensure that energy markets remain well supplied and Iran is held accountable for its aggression," he said on his official Twitter account.

The Arab Coalition, which is battling the Houthi militia in Yemen, said it was investigating the drone attacks and that it would confront “terrorist threats” to global energy security, as well as Saudi Arabia’s national assets.

“Investigations are ongoing to determine the parties responsible for planning and executing these terrorist attacks,” the coalition’s spokesperson Colonel Turki al-Maliki said in a statement.

The impact of the fires on Saudi Aramco's facilities is not yet clear. However, it is expected that the world's largest oil company will shut down the Abqaiq facility as part of standard precautionary and safety measures.

“The impact, given the redundancy at Abqaiq, could be as high as $7-$8 per barrel,” said Anas Alhajji, energy policy expert and Managing Partner at Texas-based Energy Outlook Advisors, LLC.

“The impact could be large if Abqaiq oil production is shut in due to crude quality issues,” he added. “Several measures indicate that the damage may not be that serious, but re-tooling such a huge facility may require more time than estimated by some experts.”

Saudi Aramco did not immediately respond to a request for comment when contacted by Al Arabiya English.

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