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Saudi Arabia, the world’s top oil exporter, said its energy facilities had come under attack on Sunday, targeting “the security and stability” of global supplies.
A drone attack from the sea on an oil storage tank in Ras Tanura, one of the world’s largest oil shipping ports, took place on Sunday morning, the kingdom said.
At night, shrapnel from a ballistic missile struck Dhahran, where state oil company Saudi Aramco is based and close to where thousands of employees and their families live.
Houthi fighters from Yemen, allies of Iran, claimed responsibility for the attacks, saying they had also targeted military targets in the Saudi cities of Dammam, Asir and Jazan.
A Houthi military spokesman said the group had fired 14 bomb-laden drones and eight ballistic missiles in a “wide-ranging operation in the heart of Saudi Arabia.”
Saudi Arabia’s Energy Ministry said the attacks “did not result in any injury or loss of life or property.” A person familiar with the matter said that no production had been affected.
Energy Aspects’ Amrita Sen emphasized that while a direct impact on oil supplies appeared to have been avoided, oil traders would still take the threat to the market seriously.
“The price of oil was already on a solid footing after the decision by Saudi Arabia and OPEC last week to continue to restrict production,” he said.
Brent crude, the international oil benchmark, has risen about $ 70 a barrel since the cartel and its allies outside the group, including Russia, decided not to unleash a rush of crude in the market.
Amid uncertainty about the outlook for the oil market, as the coronavirus crisis continues to impact demand for crude, the group decided not to increase production by 1.5 million barrels per day starting in April.
Given the supply constraints, while the kingdom has the additional production capacity to take advantage of, “geopolitical threats to supply will add a premium to the price,” Sen added.
The kingdom’s state media said earlier in the day that the Saudi-led military coalition fighting the Houthis had intercepted missiles and drones aimed at “civilian targets” without indicating their location.
The eastern province, where Dhahran is located, is where much of Saudi Aramco’s oil facilities are located and the attack is the most severe since September 2019.
At the time, the kingdom was rocked by missile and drone fire that hit a major processing facility and two oil fields, temporarily disrupting more than half of the country’s crude production.
The Houthis have stepped up attacks on Saudi Arabia through airstrikes and ships laden with explosives and mines in the Red Sea, exposing the vulnerability of the country’s energy infrastructure despite the kingdom’s production prowess and control over the oil market.
“The frequency of these attacks is increasing, even if the impact on energy infrastructure appears limited,” said Bill Farren-Price, director of research company Enverus. “We know there is the ability to cause serious damage, so this will increase the risk premium for oil.”
