DUBAI, UNITED ARAB EMIRATES (AP) – Saudi Arabia’s oil chief said markets are going through a “jittery period“ and reiterated yesterday that the kingdom’s ability to ensure energy security is no longer guaranteed.
Energy Minister Prince Abdulaziz bin Salman said cross-border attacks have put to question “our ability to supply the world with the necessary energy requirements“. The attacks have been carried out by Yemen’s rebel Houthis.
“In the old days, we, along with our friends here in the United Arab Emirates (UAE), worked on a collective effort to assure and ensure energy security. These pillars are no longer there,“ the minister said.
The Saudi energy minister spoke at the World Government Summit, an event sponsored by the government of Dubai, UAE.
Oil prices, already at their highest in years, have shot up further amid attacks from the Houthis on Saudi Arabia, the Organisation of the Petroleum Exporting Countries’ (OPEC) largest oil producer. Brent crude prices are trading above USD110 a barrel, though have soared at times past USD120.
The Houthis have used drones and missiles to target the kingdom’s oil facilities, and have also attacked targets in the UAE’s capital of Abu Dhabi.
On Friday, they hit a Saudi oil products storage facility in the Red Sea coastal city of Jeddah, sending huge plumes of black smoke into the air. Saudi Arabia has expressed its frustrations in official statements, saying it will not bear any responsibility for shortages in oil supplies due to the attacks.
Crude oil prices have also been buoyed by a deal struck by leading producers, led by Saudi Arabia and Russia, in an alliance known as OPEC+, which limited oil production to keep prices from crashing amid pandemic lockdowns in 2020.
The group has stuck to its cautious plan of releasing more barrels on a monthly basis as COVID-19 restrictions have eased, but critics of the plan said the Russian war in Ukraine is roiling markets and sending energy prices soaring for consumers at the pump. The UAE’s Energy Minister Suhail al-Mazrouei doubled-down on the OPEC+ alliance in remarks at an energy forum in Dubai.
The war in Yemen has rattled these two Gulf Arab states, revealing the vulnerability of their oil facilities. The largest attack claimed by the Houthis took place in late 2019 against a sprawling Saudi Aramco site in the kingdom’s eastern region, temporarily knocking out production at the world’s largest oil processing facility in Abqaiq.
As the White House inches closer to a nuclear deal with Iran, the Biden administration has tried to reassure traditional Mideast allies of its commitment to their security. Israel and several Gulf Arab states remain fiercely opposed to any efforts that would lift sanctions on Iran.
“We have developed and delivered our side of the story,“ Prince Abdulaziz said, referring to the kingdom’s position on the link between its national security and global energy market stability.
“People, others, need to deliver their own side of the commitment,“ he added. “Otherwise, the very pillar of energy security will be disturbed, to say the least.“
This year, the World Government Summit is being held on the premises of Dubai Expo 2020, the six-month-long world’s fair that concludes later this week.
