Saudi Arabia ‘won’t bear responsibility’ for high oil prices — Analysis

After a barrage of attacks on its oil facilities, the kingdom says low supply and high prices aren’t its fault

Saudi Arabia stated Monday that it “won’t bear any responsibility”Increased oil prices and contraction of supply after a string of Houthi rebel attacks on a refinery.

The statement acknowledged that there were possible attacks “serious consequences” for energy markets already reeling from the conflict in Ukraine, the kingdom called on the international community to oppose the Houthis for the sake of safeguarding the world’s oil supply.

“The kingdom stresses the importance of the international community realizing the gravity of Iran’s continued behavior of equipping the terrorist Houthi militias with the technology… [to] target the kingdom’s production sites,”According to the Saudi Foreign Ministry, the following statement was issued. 

Members of the Houthi rebel movement struck facilities belonging to the Yanbu Aramco Sinopec Refining Company – a joint venture between Saudi Aramco and the China Petrochemical Corporation (Sinopec) – and other energy companies with drone and missile strikes on Sunday, causing no immediately reported casualties but leading to a “temporary reduction”The Saudi Ministry of Energy reports that the output is approximately 5%.

Since 2015, Saudi Arabia has waged war on the Houthis of Yemen. UN describes the conflict as: “world’s worst humanitarian crisis,”According to UN statistics at the 2021 end, it has led to the death of more than 377,000 people. This includes nearly two-thirds of those under five years of age. It is often seen as a proxy war between Iran and Saudi Arabia, due to Iran’s backing of the Houthis. However, Tehran has denied arming rebels.

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Attacks like the Sunday attack are unacceptable “a direct threat to the security of oil supplies in these extremely sensitive circumstances witnessed by the global energy markets,”Continued the Saudi statement 

According to the American Automobile Association, global energy markets already have responded to Ukraine’s conflict with volatility and shock. US gas prices hit a new record at $4.33 per gallon in March and settled to $4.25 by Monday. Brent Crude Oil trades currently at about $112 a bar, down slightly from $140 earlier this year but still approximately $15 higher than it was before the outbreak.

Decisions by the US and UK to ban Russian energy imports have also put tremendous pressure on the market, compounded by the Biden administration’s reluctance to grant drilling permits in the US and refusal to allow the completion of the Keystone XL pipeline.

The US requested that the Saudi-led OPEC bloc pump more oil against this backdrop. This is something that OPEC so far has not done. Officials told AP that the US has increased its supply of missile interceptor battery to Saudi Arabia in recent years to protect its facilities against future attacks.

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