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Editorial comment

September seems to have revolved around all things Saudi. From its politics to its economics, the Kingdom of Saudi Arabia (KSA) has been overloaded with change and disturbance.


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On 14 September, the Khurais oilfield, Saudi Arabia’s second largest oilfield, and Saudi Aramco’s Abqaiq plant, the world’s largest oil processing facility, were attacked from the sky by drones and missiles. The oil infrastructure went up in flames, and images from the aftermath depict an almighty assault, with pipelines punctured and oil stabilisation towers charred from fire. The damage inflicted by the drones was extensive enough to impact the price of crude, with prices surging by nearly 20% but easing down to a 14.6% increase soon after.

Saudi Aramco had to halt production of 5.7 million bbls of crude – equivalent to 6% of global oil production and 60% of Saudi Arabia’s overall output. However, the state-owned oil company was quick to resume operations, ensuring that zero shipments to international customers were affected. Production from the Khurais oilfield resumed a mere 24 hours after the attack; meanwhile, the Abqaiq plant was soon producing 2 million bpd – although the 3.7 million bpd missing from this production will allegedly be restored before October commences. KSA is the world’s largest oil exporter, with over 7 million bpd leaving the Kingdom. Of this, the Asian continent is responsible for the largest share, importing approximately 5 million bpd of mainly light grade Arab crudes. Fortunately, KSA has stockpiled in the region of 188 million bpd of crude, according to Rapidan Energy Group. This is a figure that is due to shrink as the reserves are tapped into whilst repairs are carried out on the drone-damaged facilities.

The attack on Saudi Arabia resulted in the biggest one day disruption to oil output in history. At 5.7 million bbls of production stopped, this was more than the 2.3 million bbls in 2003 in the war in Iraq, the 5.6 million bbls in the Iranian revolution in 1978 - 1979, and the 2 million bbls during the Suez crisis in 1956 - 1957, to name a few. It is hugely concerning that a drone, a relatively cheap and agile piece of technology, has the capacity to avoid the warning and defence systems of the world’s largest oil exporter. The Middle East produces one-third of global oil supplies, so for 6% of global oil production to be halted as a result of a rebel attack using just a handful of aerial weapons, actions need to be taken to prevent a repeat situation.

In actuality, there is no quick-fix. Anti-drone defence infrastructure comes with a high price tag, as information needs to be garnered from search and track facilities to locate the presence of drones, and missile systems are needed to intercept and destroy these unwanted aerial weapons.

The disturbance in KSA’s energy sector, however, has not impacted Saudi Aramco’s progress towards its initial public offering (IPO). Valued at US$2 trillion, this will be the world’s largest IPO and a mass of wealthy Saudi nationals have been approached, though some are saying ‘bullied’ or ‘coerced’, into considering investment in the IPO. It is unclear how the attacks on Aramco’s oil infrastructure will influence investors; whether production is returned to full capacity by the end of September (as promised by Saudi Aramco), or if it takes many months (as analysts have suggested is more likely), will surely influence an investor’s decision.

To conclude on a more positive note: drones are not just used for combat, they also have the ability to do good. Particularly relevant in the wake of the 20th September Global Climate Strike, an Oxford-based company has created drones that can regenerate our shrinking forests. With 10 seed-planting drones able to plant 400 000 trees in one day, let’s hope drone technology continues to advance further down this regenerative route, rather than the destructive, disruptive one.