Saudi Unrest Will Trigger Further Oil Price Hikes


Oil prices have soared to their highest level in the past ten months following reports of an explosion of pipelines in Saudi Arabia’s oil-rich Eastern Province.

Press TV:– On Thursday evening, an explosion in Saudi Arabian city of Awamiyah in the east of the kingdom destroyed the pipelines feeding one of the most important oil hubs in the world.

The major pipeline starts in Abqaiq and ends at Ras Tanrua oil terminal carrying nearly six million barrels of oil every day.

Press TV has conducted an interview with Ali al-Ahmed, Director of the IGA, to share his opinion on this issue.

The following is a transcript of the interview:

Press TV: Now since news of the Saudi oil pipeline fire has come out as we just mentioned oil prices have gone up. Is there a direct correlation do you think here and will prices only go higher when this news spread even further?

Al-Ahmed: I think the reason that the prices have gone higher because this is the main artery for the world energy. This is where six million barrels a day approximately are going through everyday so any slight damage to the pipelines is going to create a major shock in the oil prices around the world.

And because these pipelines are such very vulnerable and they are sandwiched between two cities that have witnessed protest for the past year and I think now more than ever the people who are protesting, who have been shot and killed by the Saudi security and Saudi special forces, they realize that because the world has ignored them for a year and even Western media has not sent one reporter to cover this issue, this will lead to these pipelines being in danger.

We do not know what happened today. The fire in the pipeline was it caused by somebody or was it just an explosion, a diesel explosion? We do not know yet but that really brings attention to this issue that this region is important and vital to the world and despite the protest for the past year has not received the needed attention by world oil consumers and by the United States.

So this is an area for those who care about political risk assessment, this is an area that could cause an economic meltdown if things are not brought under control. The Saudi government is left to its own ends to kill or to increase the tension in the region.

Press TV: What does this fire then say about the state of Saudi Arabia’s pipelines? I mean can it be argued that if this was an accident that this does not bode well for the importance that the state may give to the care of its vital pipelines?

Al-Ahmed: Obviously this shows that Saudi Arabia because of its aging leadership and in-fighting among the ruling clan, such issues are not been addressed and that is why the world should not trust the Saudi monarchy with the security of the oil infrastructure.

For a long time the world, the United States specifically, has supported the monarchy because they can guarantee the oil flow. Right now this has changed and the populations in the region who have been oppressed for such a long time are more and more understanding the importance of their location and the fact that they sit on top of the major oil pathway to the world.

So if things get out of hand, if more killings and arrests happens, I think people naturally will resort to attacking or disabling this energy pathway to the world and because of the increasing tension within the country this also could cause to the oil to stop flowing in absence of political and social reforms in that country.

Press TV: It is interesting that Saudi media has always spin internal events in very awkward ways. How should we expect them to use this event to the monarchy’s advantage?

Al-Ahmed: Well the Saudi media is completely owned and run by the Saudi monarchy so nothing that they say or portray would be accurate. It would be really a series of misleading information and I cannot really speak on this issue right now because the Saudi media, the press agency, Aramco has not said anything about this fire or the damage of pipelines.

So there is something sinister about this and it is possible that the Saudi regime itself started this fire in order to get the oil price up and I am not sure how much it went up- couple of dollars probably- but because the Saudi regime understands the more threat to the oil prices, to the oil facilities, the more it will gain from selling oil, sell the same amount of oil for higher grade.

So this could be also something that the Saudi government itself has done and created in order to get more revenue out of this.

Editor’s Note: Saudi officials have denied the oil pipeline have been destroyed.

Categories: ECONOMY, ENVIRONMENT

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