#Saudi Attacks: The World's Oil Security Blanket Has Been Torched - Bloomberg

Saudi Attacks: The World's Oil Security Blanket Has Been Torched - Bloomberg:

The real impact of the attack on Saudi oil installations last weekend goes well beyond the temporary loss of 5% of global oil production: It strikes at the heart of the mechanism that’s guaranteed the security of the world’s crude supply for most of the past 50 years.

Ever since the western oil majors lost control of output in the Middle East, Saudi Arabia’s willingness to maintain idle production capacity has been the world’s safety valve to offset its dependence on the volatile region. When there was conflict and blockages elsewhere, Riyadh could always turn on the taps and serve the international market. But its new vulnerability requires a complete rethink of how we view and perhaps pay for the future security of supplies.




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25 pilotless aircraft and cruise missiles of Iranian origin were used to strike the two sites, the Saudi Defense Ministry said at a press briefing four days after the attacks. The extent of Iran’s involvement remains unclear. It may have taken a direct role or it may have supplied the Houthi rebels in Yemen with hardware. That second possibility is almost more troubling because it puts the power to wreak havoc into the hands of anybody able to fly a drone.