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Date TimeSeptember 14, 2019
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Saudi oil production halved as two major facilities hit in drone attacks by Yemens Houthi rebels
Yemen's Houthi rebels on Saturday launched drone strikes on two major Saudi Arabian oil installations, including the world's largest processing facility, causing huge blazes in an assault said to have cut the kingdom's output in half.  The Iran-backed militants claimed the pre-dawn attacks involving 10 drones had achieved direct hits on the Abqaiq plant and Khurais oilfield, warning of more to come.  "The only option for the Saudi government is to stop attacking us," said Houthi military spokesman Yahia Sarie on the rebels' Al-Masirah satellite news channel. But the Saudi-led coalition in Yemen immediately responded with two air strikes in the country's northern Saada province, a Houthi stronghold, according to witnesses and Al-Masirah. The latest violence marks a further escalation in the devastating yearslong conflict widely viewed as a proxy war between Riyadh and Tehran.  Online videos showed large fires and plumes of smoke at the Abqaiq facility - which processes a significant share of the world's oil supply - with what appeared to be the sound of gunfire in the background.  The kingdom later appeared to be playing down the impact on production, saying the blazes had been brought under control, and maintaining official silence on the extent of the damage. State television said only that exports were continuing.  But several sources familiar with the matter said the attacks had significantly disrupted operations in the world's largest oil exporter. One said they had shut down some 5 million barrels per day of crude production - almost half the kingdom's output and roughly  five percent of the world's.  It is unclear how long the shutdown will last, but anything but the briefest disruption has the potential for a serious impact on global energy supplies and prices. With the markets closed for the weekend, the immediate extent of the shock will not be felt until Monday. The attacks on the two facilities also come as state oil giant Saudi Aramco prepares for an initial public offering, part of an attempt by Crown Prince Mohammed bin-Salman to reduce the country's economic reliance on the commodity. The Abqaiq plant processes sour crude oil into sweet crude and transports it onto shipment points on the Persian Gulf and Red Sea. Estimates suggest it can process up to 7 million barrels of crude oil a day - equating to almost nine percent of the world's average daily production this year. It is not the first time it has been targeted by militants: in 2006, Al-Qaida claimed a failed suicide bomb attack on the complex.  The Khurais oil field is the country's second largest and is believed to produce more than 1 million barrels of crude oil a day - 1.25 percent of the 2019 global supply.  Previous Houthi strikes against Saudi facilities - on Shaybah oilfield last month and two oil pumping stations in May - caused fires but did not disrupt production.  More than 90,000 people have died in Yemen's war and resulting famine, which began after the Houthi Shia rebels ousted the internationally-recognised government.  Saudi Arabia, as well as other Gulf Arab nations, the UN and the West, say Iran is backing the Houthis with weapons and logistical support, a charge Tehran denies. The Houthis insist they are not Iranian puppets and are instead fighting a corrupt regime.  The Saudi-led coalition has been accused by UN investigators and human rights groups of violations that could amount to war crimes.

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