On Saturday, September 14th 2019, at 0331 and 0342 local time, two loud explosions rocked the Kurais oil filed and the Abqaiq processing facility. Saudi Aramco, the kingdom’s crown jewel who is currently preparing an initial public offering in order to raise capital for Saudi Arabia to diversify its economy away from oil, owns both facilities. The fires took hours to extinguish and the explosions left both oil facilities with heavy damage which took 5.7 million barrels of supply off the market. This is more than 50% of Saudi Arabia’s current production capacity which stands at 9.7 million barrels and about 5% of total global supply. 5.7 million barrels is also the estimated reserve capacity which has now been taken offline.

Yemeni Houthi rebels, aligned with Iran, have claimed responsibility for the attacks. The Houthi rebels used ten drones to facilitate the strikes, according to their own accounts and have been fighting the Saudi-UAE led coalition in Yemen. While Houthi drone strikes on civilian airports in Saudi Arabia and the UAE have taken place, they lacked the sophistication of this weekend’s attack. According to a UN report, the rebels have required more powerful drone technology which allows them to carry out strikes as far away as 1,500 kilometers. Following the attacks, Brent Crude traded in London surged almost 20% to $72 a barrel which marked the biggest one day jump in its history before retreating to below $66 after the US announced it would release oil from its strategic petroleum reserve (SPR).