Iran has put the price of oil at stake by attacking it with drones
The world stage is Monday, a Monday marked by Iran bombing by the United States and Israel last Saturday. Iran has not sat idly byresponding with something it has already used in the past: suicide drones to attack bases of the allies of the aggressor countries. They have attacked Dubaibut also Saudi Arabia, causing the closure of one of the key refineries globally: Ras Tanura. And the result is -another- earthquake in the world market. In short. A few hours ago, Saudi Arabia and Aramco (the oil company) made the decision to stop production at the refinery Ras Tanura. The decision came when Saudi defenses intercepted several remains of Iranian drones. They did not impact, but their remains have caused some fires within the storage facilities of the power plant. Ras Tanura. We are talking about some of the largest refineries in the world, with an estimated capacity of about 550,000 barrels per day. Its closure implies that the export operations associated with the complex stop, which is addition to the closure of other energy infrastructures in the region, such as gas infrastructure in Israel and Kurdistan. As pointed out Bloombergthe problem is that Ras Tanura is one of the key refineries in the transportation fuel segment, specifically diesel, and not only have operations stopped, but very close is one of Aramco’s largest export terminals for refined products. This is the Strait of Hormuz, with dozens of ships waiting Hormuz. Uncertainty and military operations are once again causing the Strait of Hormuz to become abuzz. Hormuz is, after Malacca, the second largest oil corridor in the worldand a disturbance in normal functioning causes the entire chain to wobble. Uncertainty is causing a monumental bottleneck with ships stopped on both sides of the strait, waits that do not know when they will end, rescheduling, diversions to other ports and, ultimately, chaos in oil transportation. Impact. And you can already guess how the market is responding. Crude oil is one of the economic thermometers today, and the initial reaction has been as expected: a strong rise in prices. The barrel has risen around 10% in some markets after learning of the closure of the refinery, but it is already estimated that they could rise more than 20% if the situation continues and the strait closes. How much? Well, it is currently around $80, more than $100, according to some analysts, and it depends on how long the situation lasts that we begin to see how this price increase affects the fuel market. Vital. It is not the first time that refineries in the area have been attacked. They have become essential enclaves in the country’s economy, but also in global geopolitics. As pointed out Reuterssuch an attack is not just another military action, “it marks a significant escalation in violence.” It implies that Iran has the Gulf’s energy infrastructure in its sights because it knows its importance to the economy of the entire globe. And, evidently, an attack on its plants could cause Saudi Arabia and its Gulf neighbors to join the US and Israeli military operations against Iran. Now, Iran has also been ‘touched’ by that basic infrastructure for its economy. The country is the third largest producer in OPEC and on February 28, explosions were reported on the island of Kharg, where process 90% of Iran’s crude oil exports. In the end, it is one more example of the domino effect and the fragile nature of the supply chain for a basic good. It’s just a part of a perfect storm whose consequences are far from reaching their ceiling. Images | MarineTrafficUS Army, VALGO In xataka | Europe believed it had won the gas war against Russia. Now it faces a much more uncomfortable reality: its dependence on the United States.
