Refinery explosions: "It is the biggest attack Saudi Arabia has had in its history"

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The barrel of Brent oil rose to a maximum of 20% and closed at around 11% on Monday 16. The US WTI also rose, but to a lesser extent. Both movements were motivated by the attacks on Saturday 14, against two refineries of the state-owned oil company Aramco, in Saudi Arabia.

Although the Yemeni group of the Ansar Allah Movement vindicates the drone attacks, Saudi Arabia insists that the weapons used are Iranian and not Yemeni. The tension in the area is maximum and in addition to the geopolitical conflict at the door, the economic consequences of the attack were swift.

"This is the biggest punctual attack that Saudi Arabia has had in its history. It will practically stop oil production in 5.7 million barrels. We are talking about just over 5% of daily world production," he told Sputnik the economist Rafael Quiroz.

Those 5.7 million also represent 50% of what the kingdom produces each day. However, according to the statements of Saudi Energy Minister Abdulaziz bin Salman, the damages will not be transferred to customers.

"Saudi Arabia has something interesting: a large storage capacity. The country can resort to its market reserves, to stocks in its inventories so as not to fail in terms of supply to its customers," said the oil market expert.

Anyway, this Monday the markets showed the impact of the events of the weekend. Prices, which at the beginning of the day reached price increases of up to 20% for Brent and 12% for WTI, closed with increases of 11% for both barrels. In the case of Brent, the strong 'intraday' increases were not recorded since 1988.

"This is a purely short-term variable, geopolitical in nature and will have its effect on prices as long as it impacts the oil market. How much it will depend on the response capacity of Saudi Arabia to recover quickly from the damages that have impacted your industry, "added the expert.

On Monday, the United Arab Emirates and OPEC sources said the block is measuring the impact on the market that the attacks had. In any case, they considered that it is too early for their members to take actions such as an increase in production or an emergency meeting.



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