Grab Your Canola Oil, You Might Need It

Calvin Mueller, Headline News Editor

Modern warfare is more common than ever. Saudi Arabia, a country often referenced as a leader in the oil industry was attacked by a drone on September 14th at two main drilling cites. Who was behind the attack is disputed, the United States and Saudi Arabia are blaming Iran while Iranian backed Houthi rebels in Yemen have claimed responsibility. The Saudi Government-owned oil producer, Aramco was attacked in Abqaiq and Khurais—the main Saudi Aramco pumps. 

How does this affect the global market, Saudi Arabia, and Aramco?

Crown Prince Mohammed bin-Salman

Many are concerned about the effect the attack will have on gas prices in the United States but don’t worry, it’s not as bad as we think; “[gas prices could] rise as much as 25 cents per gallon. Which doesn’t sound too bad compared to the effect the attacks could have on the Saudi economy—who produces a mere 10% of the globe’s oil—but it’s unsure how much damage will actually happen. Saudi Aramco is the most profitable company in the world (with 111.1 billion dollars in profits last year alone), and critically important to the Kingdoms’ economy. The attack also plays an interesting role with the company, because they were planning on going public with an IPO offering of around 5%. However, Energy Minister Prince Abdulaziz bin-Salman has reported that Aramco “will restore its lost oil production by the end of September and has managed to recover supplies to customers to the levels they were at prior to the weekend attack.” 

What does this mean for the United States and the Middle East?

The initial reaction to the attacks from the United States was harsh with President Trump threatening Iran by saying the United States was “locked and loaded.” He later softened his tone by imposing more sanctions to further the economic chokehold the U.S. has on Iran. The blame game on where the drones originated from is still enduring with the U.S. and Saudi Arabia still blaming that they came from Iran. Saudi Arabia has stated that the attacks came “unquestionably” from the north. In response, Houthi rebels have stated that drones can fly up to 700km. Mike Pompeo has used sharp and aggressive language towards Iran stating that the attack was “an act of war.” Iranian officials have responded by saying that if Saudi Arabia or the United States were to attack Iran, it would cause ”an all-out war.”