Attacks on Saudi oil make waivers on Iran necessary: Experts

Experts say critical oil supplies lost due to Yemeni attacks on Saudi Arabia’s production plants can only be compensated if the United States eases its sanctions on sale of crude by Iran.

According to Press TV, Sandy Fielden, an analyst at Morningstar, a global financial services firm based in the US, said on Saturday that the current oil stocks in Saudi Arabia, the biggest oil exporter in the world, would not suffice to compensate for a loss of around 5 million barrels per day (bpd) that could be caused by attacks earlier in the day targeting the kingdom’s vital oil facilities located east of the country.  

The attacks "resulted in a temporary suspension of production at Abqaiq and Khurais plants," Prince Abdulaziz bin Salman, the Energy Minister said in a statement carried by the official Saudi Press Agency. It led to the interruption of an estimated 5.7 million barrels of crude, or about 50 percent of total production, he added.

Fielden said the disruptions could cause a real jump in the global oil prices, adding that the US, a main player in the oil market and an ally of the Saudis, would have no option but to allow Iran to resume its crude exports after months of a halt that has been caused by Washington's unilateral bans.

“By all accounts the Iranians have tankers full of storage ready to go,” he said, adding, “The obvious short-term fix would be waivers on Iran sanctions.”

Yemen’s ruling Ansarullah Movement said on Saturday that its drones had successfully attacked two oil plants in Abqaiq, the heart of Saudi Arabia’s oil industry, in the kingdom’s Eastern Province.

The Ansarullah fighters said the attacks were a firm response to Saudi Arabia’s relentless bombardment of Yemen, where tens of thousands of civilians have been martyred since Riyadh launched its illegal military campaign four years ago.

James Krane, West Asia energy specialist at Rice University’s Baker Institute, suggested that supplies from a country like Iran would be the best option to replace the lost Saudi production as most of the Kingdom’s exports normally go to countries in Asia that are closer to Iran than any other major oil producer.

“For the United States, the main threat is in the price of oil,” said Krane, adding, “Asian countries are more at immediate risk because they are the big importers from Saudi Arabia, with 80% of Saudi exports going to East Asia.”

ME