Saudi Arabia has said it will not be held responsible for shortages in the global energy market as it warned on Monday that missile attacks on oil installations by Iranian-backed Houthi rebels in Yemen will disrupt supply.
There has been pressure on Saudi Arabia, the world’s biggest oil producer, to produce more oil to ease market volatility in the wake of the Russian assault on Ukraine. But Saudi Arabia and the United Arab Emirates, its neighbour and ally, have so far rebuffed US and UK calls to boost production. Prices for Brent crude — the international benchmark — rose more than 3 per cent on Monday to a high of $113 a barrel.
In a statement published by official media on Monday, the kingdom said: “Saudi Arabia announces that it will not bear responsibility for any petroleum shortages in global markets in light of the attacks on its installations by the terrorist Houthi militias.”
The statement by the Saudi foreign ministry came a day after successive missile and drone attacks on energy facilities in the kingdom. One of the strikes on a Saudi Aramco distribution centre in Jeddah set off a fire in a storage tank. The Houthis have claimed responsibility and vowed further attacks. It is not clear if the attacks disrupted oil production.
Amin Nasser, chief executive of Saudi Aramco, told reporters on Sunday that the company had adopted contingency plans to ensure it could fulfil its contracts. The attacks came as Saudi Arabia prepared to host negotiations between Yemen’s factions organised by the Gulf Cooperation Council. The Houthis have said they would boycott the talks.
The kingdom and the UAE have grown increasingly frustrated with what they view as a lack of support from allies such as the US against the Houthis. They have asked US president Joe Biden to relist the Houthis as a terrorist organisation after he reversed that designation when he came to office. Biden also ended support to the coalition in Yemen and the US has suspended sales of offensive weapons to Saudi Arabia, although it continues to provide missile interceptors.
Monday’s statement blamed Iran for providing the Houthis with missiles, and said the attacks “will affect the kingdom’s production capacity and its ability to fulfil its commitments”. It said the “international community should assume its responsibility in preserving energy supplies and standing decisively against the terrorist Houthi militia”.
The Houthis, who have been fighting a Saudi-led coalition in Yemen since 2015, have conducted numerous attacks on Saudi Arabia, and lately on its coalition partner, the UAE. They claimed credit for a 2019 attack on Saudi oil installations that temporarily halved the country’s production. Western countries and Saudi Arabia blamed Iran for that attack.
The Saudi statement allowed the kingdom to increase the pressure on the Houthis, said David Roberts, a Gulf expert at King’s College London. He added: “They further defend themselves from whatever offensive tactics they employ against the Houthis on the grounds it’s ‘for the good of the oil price/stabilising international supply’.”
The statement came as European countries considered another round of sanctions on Russia that could include a ban on buying Russian oil. The Kremlin has warned such a boycott would affect the global oil market and Europe in particular.
Since the invasion of Ukraine, Saudi Arabia has publicly repeated its commitment to the Opec+ agreement in which producers agreed a monthly increase of 400,000 barrels a day. Russia is part of Opec+ and Moscow and Riyadh have co-ordinated production levels since late 2016.
Source: Financial Times