by Aramco Oil Processing Facility Attacked
On Saturday, September 14th, 10 drones struck hit Hijra Khurais, one of Saudi Arabia’s largest oil fields producing about 1.5 million barrels a day, as well as Abqaiq, the world’s biggest crude stabilization facility, which processes seven million barrels of Saudi oil a day. On Saturday the attack Houthi Rebels, an islamic rebel force that has gained control of northern Yemen over the past two years, claimed to be responsible for the attack. However, both the United States and Saudi Arabia deny that claim. A CNN article quotes Secretary of State Mike Pompeo tweet: “Iran has now launched an unprecedented attack on the world’s energy supply.” And he added: “There is no evidence the attacks came from Yemen.”
What does this mean for Aramco and their current oil supply? According to the Wall Street Journal, the company had to suspend over half of its oil production which results in nearly 5% of the global oil supply. An update from Saudi officials on Sunday, September 15th reports that the company will have one-third of the crude output back online. Analyst from CNBC claim that the reduction in output could possibly cause oil to increase $5 to $10 a barrel.
These attacks follow continued talks from Saudi Arabia about pushing for the listing of Aramco. It is likely that these attacks could possibly push back said listing, but will most likely affect the risk evaluations for the company. Banks and firms use risk evaluations in the process of finding a total valuation of a company. Since the first listing will be local, the price of the listing will likely not be affected.