Yemen rebels launch barrage of strikes on Saudi energy sites

The disruption, as oil prices spike in an already-tight energy market, “will be compensated for from the inventory,” the ministry said, without elaborating.

Another aerial attack later in the day struck a fuel tank at an Aramco distribution station in the port city of Jiddah and ignited a fire.

The relentless wave of strikes revealed the expanding reach and precision of the rebels and the persistent gaps in the kingdom’s air defences. A sophisticated strike in 2019 on Aramco oil facilities knocked out half the kingdom’s oil production and threatened to ignite a regional crisis – an attack that the US and Riyadh later alleged came from Iran.

The attacks on Sunday came as Saudi Arabia’s state-backed Aramco, the world’s largest oil company, announced its profits surged 124 per cent in 2021 to US$110 billion, a jump fuelled by renewed anxieties about global supply shortages and soaring oil prices.

Aramco, also known as the Saudi Arabian Oil Co, released its annual earnings after weeks of intense volatility in energy markets triggered by Russia’s invasion of Ukraine.

The international oil benchmark Brent crude spiked over US$107 on Sunday after nearly hitting a peak of US$140 earlier this month. Saudi Arabia and the United Arab Emirates have so far resisted Western appeals to increase oil production to offset the loss of Russian oil as petrol prices skyrocket.

Yehia Sarie, a spokesman for Yemen’s Iran-backed Houthis, said the rebels had launched “a wide and large military operation” in retaliation for the Saudi-led “aggression and blockade” that has turned much of Yemen into a wasteland.

The escalation followed a flurry of diplomacy over the weekend in Oman’s capital of Muscat. The UN special envoy for Yemen, Hans Grundberg, met the chief Houthi negotiator and Omani officials to discuss “a possible truce during the holy month of Ramadan” in early April, the UN mission said.

The White House condemned the attacks, blaming Iran for supplying the Houthis with missile and drone parts, as well as training and expertise.

“It is time to bring this war to a close, but that can only happen if the Houthis agree to cooperate with the United Nations,” said US National Security Adviser Jake Sullivan. “The United States stands fully behind those efforts.”

The Saudi-led military coalition reported aerial strikes on a range of facilities: an Aramco liquefied gas plant in the Red Sea port of Yanbu, an oil storage plant in Jiddah, a desalination facility in Al-Shaqeeq on the Red Sea coast and an Aramco oil facility in the southern border town of Jizan, among others.

The extent of damage on Saudi infrastructure remained unclear, and the ministry said only the Yanbu refinery saw a temporary drop in output. A joint venture between Aramco and China, the US$10 billion Yanbu Aramco Sinopec Refining Company on the Red Sea pumps 400,000 barrels of oil a day.

The Saudi Press Agency shared photos of fire trucks dousing leaping flames with water and a trail of rubble wrought by shrapnel that crashed through ceilings and pocked flat walls. Other images showed wrecked cars and giant craters in the ground.

The barrage comes days after the Saudi-based Gulf Cooperation Council invited Yemen’s warring sides for peace talks in Riyadh – an offer dismissed out of hand by the Houthis, who demanded that negotiations take place in a “neutral” country.

Negotiations have floundered since the Houthis have tried to capture oil-rich Marib, one of the last remaining strongholds of the Saudi-backed Yemeni government in the country’s north.

Yemen’s brutal war erupted in 2014, after the Iran-backed Houthis seized the country’s capital, Sanaa. Saudi Arabia and its allies launched a devastating air campaign to dislodge the Houthis and restore the internationally recognised government.

But years later, the war has settled into a bloody stalemate and created one of the worst humanitarian crises in the world.

Coalition air strikes have struck civilian targets in Yemen such as hospitals, telecommunications centres and wedding parties, drawing widespread international criticism.

Saudi Crown Prince Mohammed bin Salman. Photo: Courtesy of Saudi Royal Court / Handout via Reuters

Saudi Crown Prince Mohammed bin Salman. Photo: Courtesy of Saudi Royal Court / Handout via Reuters

Repeated Houthi cross-border attacks have rattled world energy markets and raised the risk of disruptions to output at Aramco sites.

As part of its 2021 report, Aramco said it stuck to its promise of paying quarterly dividends of US$18.75 billion – US$75 billion last year – due to commitments the company made to shareholders in the run-up to its initial public offering. Nearly all of the dividend money goes to the Saudi government.

Despite Saudi Crown Prince Mohammed bin Salman’s increasing efforts to diversify the Saudi economy away from oil, the kingdom remains heavily dependent on oil exports to fuel government spending.

Riding on its 2021 income surge, Aramco said it expects to raise its capital expenditure to between US$40 and US$50 billion this year to meet growing energy demand, a sizeable increase from last year’s spending of US$31.9 billion.

Aramco shares were up over 3 per cent on Sunday to trade around 43.20 riyals (US$11.50) a share on Riyadh’s Tadawul stock exchange.

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