Saudi Arabia guards biggest oil facility with an eagle eye

Saudi Arabia is closely monitoring its biggest oil facility located at the country’s eastern portion.  Members of the Facilities Protection Force are currently detailed in the area, and highly sensitive detectors have been installed to provide additional security.

Saudi’s extra precautionary measures over its oil facilities were triggered by conflicts in the Persian Gulf and the political and economic pressures brought about by oil sanctions on Iran. However, a stronger threat to security was the recent US-Saudi discovery of a bomb-building scheme in Yemen.  These conditions have partly pushed crude oil price per barrel to beyond $100 in the recent months.

Saudi Arabia’s forces are likewise into military exercises. Under simulated terrorist attacks, forces are trained to handle remote control gadgets for neutralizing explosives. According to the government, more than 2000 Saudi forces are experts in this field.

Based on pronouncements by Georgetown University political scientist Paul Sullivan, another wave of terrorism against Abqaiq can be devastating and may eventually bring current crude oil prices to levels beyond $200 per barrel.

The world market is becoming more aware of oil price susceptibility to violence and terrorism in the mid-east.

In 2006, Islam forces identified with the al-Queda attempted a car bomb attack on Abqaiq causing a 4 percent increase in oil prices.

In March this year, rumors have spread on various social media networks that explosions brought heavy damage to Saudi’s oil pipeline near Ras Tanura. Crude oil prices immediately rose 3 percent, but also declined after Saudi officials quelled such rumors.

Following a 10 percent drop this month, crude has been trading at $94 per barrel in New York.

Shiite Muslims residing along the al-Qatif refinery are also posing threats to security, particularly those who have strongly protested against Saudi government.  According to Saudi officials, this minority group has somehow become a new breed of radicals which the kingdom has to deal with, on top of other challenges.

The country is known for maintaining one-fifth of global oil reserves and, as such, it plays a vital role in bringing on its vast reserves in case of an oil shortage.

Jadwa Investment Company’s Chief Economist Paul Gamble said “Saudi Arabia is the only place that has significant spare production capacity.  If something eats into that there’s little scope for production elsewhere being raised to compensate”.

By: Chris Termeer