Attack on Saudi oil facilities is not likely to have an impact on U.S. economy: Report

By Jon Dougherty

(NationalSentinel) An overnight attack against a Saudi oil facility is likely to result in a temporary disruption of about 5.7 million barrels of oil per day but it won’t affect the U.S. economy, The Wall Street Journal reported Sunday.

The attack, which Secretary of State Mike Pompeo has blamed on Iran, could spur higher oil prices, but if so it would mostly affect China and Japan, the paper noted.

U.S. and Saudi officials say the attacks were carried out by drones that belonged to Iranian forces, not Yemen as Tehran has suggested.

On Saturday, Pompeo charged that Iran’s government in Tehran ordered “nearly 100 attacks” on a Saudi refinery and oilfield, further alleging that Iranian President Hassan Rouhani and Foreign Minister Mohammad Zarif pretending “to engage in diplomacy,” Fox News reported.

“We call on all nations to publicly and unequivocally condemn Iran’s attacks. The United States will work with our partners and allies to ensure that energy markets remain well supplied and Iran is held accountable for its aggression,” he added.

As for the disruption in supplies, the Saudi government said that it would restore full production capacity by Monday.

That said, analysts who spoke to the WSJ said that the U.S. economy today is much different and more diversified than it was in the 1970s, when any disruption in oil supplies from the Middle East would have been much more impactful.

For example, energy today accounts for about 2.5 percent of U.S. household consumption, down from 8 percent in the 1970s, according to Bank of America economists.

Also, since the early 2000s, the U.S. has ramped up domestic oil exploration and production, which really took off after President Donald Trump took office.

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“Oil production doubled between 2008 and 2018, and the U.S. is now the world’s top oil producer, ahead of Saudi Arabia, according to the Energy Information Administration,” the WSJ reported.

Yemen’s Houthi rebels claimed responsibility for the Saturday attacks, and while it may be that they actually launched them, the drones no doubt came from Iran since Yemen lacks the production capacity to produce them.

The attacks resulted in “the temporary suspension of production operations” at the Abqaiq processing facility and the Khurais oil field, Riyadh said. They followed weeks of similar drone assaults on the kingdom’s oil infrastructure, but none of the earlier strikes appeared to have caused the same amount of damage, Fox News added.

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