Oil prices may go up as much as $100 after half of Saudi Arabia’s oil production went offline following a surprise drone strike by Houthi fighters.
The drones hit Saudi’s Abqaiq facility in Saudi Arabia and the Khurais oil field run by Saudi Aramco early Saturday morning, the kingdom’s interior ministry said, sparking a massive fire at a crude processing plant essential to global oil supplies.
The closure will impact nearly 5 million barrels of crude processing per day, affecting 5 percent of the world’s daily oil production, oilprice.com reported.
While Aramco is confident that it can recover quickly, if it can’t, however, the world could face a production shortage of as much 150MM barrels per month. An outcome which could send oil prices into the triple digits.
Houthi fighters–who are backed by Iran in a yearlong Saudi-led battle in Yemen–have apparently asserted responsibility for the strikes and pledged that more assaults can be expected in the future.
A Houthi spokesperson explained, “We promise the Saudi regime that our future operations will expand and be more painful as long as its aggression and siege continue,” adding that the attack involved ten drones.
The Iran-backed Houthis have recently been behind a number of assaults on Saudi pipelines, vessels and other energy infrastructure as tensions grow in the region.
There have been no details on the severity of the damage but Agence France-Presse quoted interior ministry spokesperson Mansour al-Turki as saying that there were no human casualties as a result of the attack.