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Failed terrorist attack in Saudi Arabia sends oil prices higher

CAIRO, Egypt—Suicide bombers tried to blow up the world's largest oil-processing plant in Saudi Arabia on Friday. The attack failed, but the price of oil rose by more than $2 a barrel anyway—an indication of how seriously oil traders fear a successful strike would disrupt world oil supplies.

A Saudi statement said the attack caused only a "minor fire, which was immediately extinguished" and didn't disrupt oil or gas production.

But the assault on the Abqaiq compound near the Persian Gulf, through which two-thirds of Saudi oil exports pass, was the first on a significant Saudi oil facility. Oil experts warned that other attacks are likely.

"Energy structures are always a target and always vulnerable," said Saadalla Al-Fathi, a Sharjah-based oil consultant familiar with the Abqaiq field. "The attacks in Iraq have significantly downgraded the oil production and export there, so the impact of such incidents cannot be underestimated."

No group claimed responsibility, but suspicion immediately fell on Osama bin Laden's al-Qaida terror network, which has long vowed to target Saudi oil sites. Saudi security forces have been battling al-Qaida operatives for the past two years in a crackdown that often has erupted in spectacular public gunfights.

Accounts of Friday's attack varied. Saudi police officials told reporters that two cars tried to drive through the gates of the outer fence of the heavily fortified compound. Guards opened fire on the cars and both vehicles exploded. At least two guards were reportedly wounded.

Arabic-language satellite TV channels reported that only one car exploded and that guards killed the driver of the second car before it detonated. Local residents told news agencies they heard two blasts near the plant and saw two charred vehicles at the scene.

Saudi security forces swarmed the area after the attack, which occurred just after 3 p.m. There were reports of a gun battle after the explosions.

It was unclear just what the would-be bombers intended to target in the huge Abqaiq plant, but the impact on oil futures was immediate. The price of light sweet crude rose $2.37 to close at $62.91 a barrel on the New York Mercantile Exchange.

Oil prices were already under pressure because of attacks by rebels in Nigeria, which have taken almost 500,000 barrels of crude oil a day off of global markets.

Sometimes referred to as the world's most important oil facility, the Abqaiq plant is operated by Saudi Aramco, the state-owned oil company. The plant receives crude oil from nearby fields and pumps it to oil shipping terminals on both the Persian Gulf coast and, westward across the country, on the Red Sea.

"It's a pretty significant facility," said Geoff Porter, head of the Middle East practice for the risk-assessment firm Eurasia Group. He said 93 percent of the 6.8 million barrels processed daily at Abqaiq is exported.

Porter said the upside of Friday's events is that the attack was repulsed. By thwarting the attack, Saudi forces have shown their mettle, he suggested, and terrorists are more likely to turn their attention to softer targets such as businesses and hotels.

In a statement, Saudi Oil Minister Ali al-Naimi said that the guards who prevented the attack were a mix of Saudi security forces and private guards working for Saudi Aramco.

Saudi Arabia has been openly warring with al-Qaida-allied Islamist extremists since May 2003, when suicide bombers struck three foreign housing complexes in Riyadh, the capital.

In May 2004, militants stormed the offices of an American oil company in the western Saudi area of Yanbu, killing six Westerners and a Saudi before guards killed the attackers. Several weeks later, al-Qaida-allied gunmen stormed oil company compounds in the eastern city of al-Khobar and took hostages. By the end of the siege, 22 people were dead.

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(Knight Ridder Newspapers correspondent Kevin G. Hall contributed to this report from Mexico City.)

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(c) 2006, Knight Ridder/Tribune Information Services.

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