Saudi Wealth and Weaponry Still Can’t Guarantee Oil’s Protection - Bloomberg:
How could Saudi Arabia, a country with the world’s third-largest military budget and six battalions of U.S.-built Patriot missile-defense systems, fail to defend the beating heart of the oil industry on which the kingdom depends?
That question lies at the heart of responses to Saturday’s attack on Abqaiq, which cut Saudi oil production by half, and is critical to any assessment of whether investors will have to permanently factor higher political risk assumptions into the price of oil.
As audacious as the strike was, it was only the latest in a series and should have come as no surprise. The effectiveness of the Saudi military machine has long been questioned, despite spending $83 billion on defense last year, compared to $45 billion for Russia and $20 billion for regional rival Iran. The kingdom’s formidably equipped air force has been bombing Iran-backed Houthi rebels in neighboring Yemen since 2015, but has so far failed to tip the civil war in favor of Saudi allies.
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