weekend drone attack on one of world's largest crude oil processing plants that dramatically cut into global oil supplies is most visible sign yet of how Aramco's stability and security is directly linked to that of its owner Saudi government and its ruling family. strikes, which US Secretary of State Mike Pompeo blamed on Iran, despite staunch denials by Tehran, led to suspension of more than 5 per cent of world's daily crude oil production, bringing into focus just how vulnerable company is to Saudi Arabia's conflicts outside country's borders, particularly with regional rival Iran. 

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Aramco produces and exports 9.5 million barrels of oil per day

That matters greatly because Aramco produces and exports Saudi Arabia's more than 9.5 million barrels of oil per day to consumers around world, primarily in Asia. It also comes as state-owned company hes toward a partial public sale. To prepare for an Initial Public Offering (IPO), company has recently taken steps to distance itself from Saudi government, which is controlled by Al Saud ruling family. 

plan to list part of Aramco is key to Crown Prince Mohammed bin Salman's ecomic diversification efforts that are aimed at preparing kingdom for a future, less reliant on oil exports for revenue. As he races to overhaul ecomy, he's also led Saudi Arabia as its defence minister into a war in Yemen that appears to have me kingdom, and by extension Aramco, more vulnerable to attacks. pre-dawn attacks Saturday were claimed by Iranian-backed Yemeni rebels, although re are questions about wher drones were launched from Yemen. 

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Saudi Arabia at war with Houthi rebels

Saudi Arabia has been at war with Houthi rebels in Yemen since early 2015, but this is by far most infrastructurally devastating attack inside kingdom since conflict began. Eurasia Group tes that Saudi Arabia's air defence systems are designed to defend against tritional threats but are ill-equipped to tackle asymmetrical aerial threats from drones. 

attacks targeted Abqaiq processing facility and Khurais oil field. Abqaiq is home to world's largest oil processing facility and crude oil stabilisation plant, where oil is me safe for transport on ships. Aramco's handling of incident is being watched closely, particularly amid reports of a local listing of 1 per cent of company as soon as vember. 

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5.7 million barrels of crude h been disrupted

public first learned of attacks from residents of area who uploed videos and photos of massive fires at processing facility in eastern city of Buqyaq. It wasn't until 22 hours later that Aramco issued its own statement, ackwledging its plants h been attacked and that daily production of 5.7 million barrels of crude h been disrupted. 

Aramco CEO Amin Nasser was quoted in brief statement as saying work was underway to restore production and a progress update would be provided in around 48 hours. Wall Street Journal cited Saudi officials as saying a third of output would be restored on Monday, but a return to full production may take weeks.

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How long will suspension last?

What commodity trers are most looking for w is how long suspension of production will last. Aramco has t said what that timeframe might be. Crude oil futures shot up 9.5 per cent to USD 60 after tring opened Sunday evening in New York to a dramatic increase.

sustainability of rally will hinge on an assessment of magnitude and duration of supply shortfall, said Vandana Hari, founder of Singapore's Vanda Insights. Hari said potential investors in Aramco are going to be looking at company's transparency and communication practices in this current crisis. "Having said that, it's clear that Aramco does t operate independently from government and is t free to man its own messaging," she said. 

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Loss of more than 5% of world's oil supply

loss of more than 5 per cent of world's oil supply - matter for how many days - is t an internal Saudi matter, she said. "It is whole world's concern. With that in view, official communication on matter has fallen woefully short so far." Hasnain Malik, he of equity strategy research at Tellimer investment research and visory firm, said attacks demonstrate security risks "which should be baked into valuation of Aramco."

Saudi Crown Prince has set Aramco's valuation at around USD 2 trillion, but many estimates put it closer to USD 1.5 trillion. Ranjith Raja, a le analyst at Refinitiv, said a major disruption to Aramco's processing plant will have an effect on company's ability to meet client expectations and contract requirements. Alrey, ship tracking data shows some 16 tankers that can carry 2 million barrels of crude anchored off Saudi Arabia's eastern coast until furr tice. 

World's largest and most vital oil producers

About four ships are loed each day from Saudi Arabia's main eastern port, but since attack, only two have been loed and left ir docks, Raja said. security and stability of Saudi Arabia as one of world's largest and most vital oil producers was emphasised by US President Donald Trump in a call with crown prince "to offer his support" to kingdom after attacks.

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