The drone attacks on Saudi Arabia’s Aramco – the world’s biggest oil company – have not only sparked a new regional conflict but, has also rocked international oil markets.
After the attacks, the per barrel oil price jacked up to $68 on Monday, which has now come down to $64 – at least $4 higher than the previous rate.
While the correct assessment of the damages is yet to be made, the oil supply from the country has been significantly disturbed. Experts believe that it will take another couple of weeks before the supply is fully restored.
The Saudi authorities have, however, assured to keep the supply regular from reserved resources. Despite that, the Kingdom’s overall oil contribution to the international market has reduced by 5 percent.
Both, Saudi Arabia and the US, have blamed Iran, which denies any involvement in the attacks. The US has termed it an ‘act of war’ and said was discussing several retaliatory options with Saudi Arabia.
This may intensify the already heightened tension between the two Muslim countries in the region. Both are among the largest oil producers of the world.
The impact of this tug of war and reduced oil supply from Aramco may affect Pakistan severely because the country imports 80 percent of its oil from Saudi Arabia and the UAE.
The oil prices in Pakistan are already on the surge; such a situation may further increase the rates in the country.
According to BBC Urdu, officials in Pakistan are cautious about discussing the issue but do not rule out the possibility of an adverse impact on the country’s import bill.
Since the country is heavily dependent upon Gulf countries for oil supply (because of the lower cost), any disruption may lead to a massive hike in oil prices.
Moreover, if Iran refuses oil supplies from the Strait of Hormuz, Pakistan would be affected more than any other country.
Additionally, if the oil supply gets disturbed due to any regional conflict, Pakistan would have no choice but to look for other options for oil import. This may cause a dramatic price surge.
A spokesperson of Pakistan’s petroleum ministry told BBC Urdu that the country was optimistic about the impact of the attacks on Armco.
We hope that Saudi Arabia will soon take control of the situation.
When approached, the spokesperson of the Oil and Gas Regulatory Authority (AUGRA) refused to comment on the increase or decrease of the prices. He said that the regulatory body determines the oil prices using the formula given by the government.