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Houthi rebels claim responsibility for Saudi oil facility attack

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Houthi rebels in Yemen have claimed responsibility for attacks that set two major Saudi Arabian oil facilities ablaze, raising fears for supplies from one of the world’s largest energy producers.

The attacks on Abqaiq, a vital oil processing centre south-west of Saudi Aramco’s headquarters in Dhahran, and the Khurais oilfield happened in the early hours of Saturday morning, marking the most successful strike to date on Saudi energy facilities by the Iranian-backed rebels.

Pictures and video posted on social media showed large fires at Khurais which lies more than 500km from the Yemen border.

The 7m barrel-a-day facility is used to stabilise and upgrade up to 70 per cent of the Opec kingpin’s near 10m barrels a day of oil production.

Saudi Arabia supplies more than 10 per cent of global crude and is the world’s largest exporter of oil.

The interior ministry said the fires had been brought under control by Saudi Aramco’s industrial security unit. But the scale of the attacks will raise fears that the kingdom’s energy infrastructure is vulnerable to increasingly sophisticated attacks by Iran-aligned Houthi rebels.

Oil prices slipped this week after John Bolton, a noted Iran hawk, left his role as National Security Adviser to the White House and as US president Donald Trump had indicated he was willing to talk with Iran, which wants sanctions removed.

Helima Croft at RBC Capital Markets said the Houthi attacks showed that risks to oil supplies remained heightened in the region. “It shows that despite the dismissal of Bolton and president Trump’s flirtation with talks, the risk of a dangerous escalation remains ever present,” Ms Croft said.

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“I think the [oil] market does not appreciate the severity of the risk. Aramco has really invested in beefing up security but these groups only have to be lucky once.”

The four-years war between a Saudi-led coalition and Houthi rebels in Yemen has been described by the UN as the world’s worst man-made humanitarian crisis. It has brought the Saudis into near conflict with regional rival Iran.

There has been a surge in attacks on Saudi oil infrastructure and tankers in the Gulf over the summer. The US and Saudi Arabia have blamed Iran and its proxies. Tehran has denied responsibility.

In August Houthi rebels launched a drone attack on the Shaybah oilfield and in May claimed responsibility for the pipeline attack, which like Saturday’s attacks happened far from the border. But US officials later said they believed it originated in southern Iraq, where Iranian-aligned militias are active.

Houthi rebels said Saturday’s attacks involved 10 drones. “We promise the Saudi regime to expand our operations in future and to be more painful as long as its aggression and siege continues,” a military spokesman said,

Tension in the Gulf has increased since the US withdrew from the 2015 nuclear accord with Iran and began tightening sanctions in a bid to squeeze the Islamic republic’s oil exports.

The US earlier this month unveiled more sanctions against Iranian entities and offered to pay captains if they helped Washington seize shipments of Iranian crude as it seeks to bolster its “maximum pressure” campaign.

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Last month Gibraltar released an Iranian tanker that British forces had detained in July on suspicion that it was sailing to Syria in breach of EU sanctions. The UK has claimed the tanker has delivered oil to Syria, despite assurances from Iran it would not do so.

Iran in July impounded a UK-flagged vessel in the Gulf.

A US drone was downed by Iranian forces in June, prompting US president Donald Trump to order military action against the Islamic republic, only to call them off at the last moment.

Saudi forces foiled an attempted attack on Abqaiq by Islamist extremist group al-Qaeda in 2006.

Saudi Aramco has been fast tracking plans to launch an initial public offering as soon as later this year as part of the kingdom’s economic reform efforts.

Via Financial Times

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