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Saudi Arabia has apparently shut down half its crude oil production after the world's largest oil processing facility was attacked in a drone strike. The local Houthi rebels have claimed responsibility. But do not be surprised to see the Saudi's blame Iran for this attack.
The Saudi's have lately promised that if it can't export its oil then "no one will".
Saudi Arabia is shutting down half of its oil production after drones attacked the world’s largest oil processing facility in the kingdom, The Wall Street Journal reported. The closure will impact almost five million barrels of crude production a day, about 5% of the world’s daily oil production, the WSJ reported, citing sources familiar with the matter.
Early Saturday, an oilfield operated by Saudi Aramco, the state-owned oil giant, was attacked by a number of drones, which sparked a huge fire at a processor crucial to global energy supplies. Yemen’s Houthi rebels have claimed responsibility for the attack, saying it was one of their largest attacks ever inside the kingdom, the WSJ reported.
Go fill up your tanks people. Gasoline prices are going up as a result of this.
Also, for active stock traders, this is likely to be good news for the American fraking sector, which has been struggling as of late. Most of those companies are likely to see their stocks rise Monday on this news.
Further, the tensions between Saudi Arabia and Iran are ominous indeed. We have been waiting or decades for a real blowup in that region between these powers. Hopefully it does not happen. But it appears that all the pieces are in place.
The Houthis say they hit the complex with 10 remote controlled drones. This is becoming a thing. The was another drone attack over there that killed a bunch of Saudi military brass last year. In Syria someone uses drones to attack the naval base there but Russian air defense takes them out. Pantsir S1s are apparently very good at it. I think they had 18 in the air one time and disabled, shot down or co-opted every one of them.
The problem is these things can be launched from the back of a car or for the bigger ones carried in a car assembled and launched in minutes. The only defense so far is an entire system like what Russia is using. It's not cheap and targets like oil refineries are huge targets.
I'm no fan of the Saudis, but it is clear the Yemeni Houthis have Iranian assistance here.
Certainly the Saudi's are going to approach this with that initial expectation.
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