Saudi Arabia Shoots Down Drones Targeting Major Shaybah Oilfield

Saudi Arabia has intercepted and destroyed four drones headed toward its Shaybah oilfield as the war in the Middle East is escalating and sending oil prices past $100 per barrel.

Major General Turki Al-Maliki, a spokesperson of the Saudi Ministry of Defense, said early on Monday that four drones were intercepted and destroyed in the Empty Quarter while heading toward the Shaybah field, the official Saudi Press Agency reported.

Shaybah’s total production capacity is about to 1 million barrels per day (bpd) — double the initial capacity, according to Saudi Aramco, the Kingdom’s state oil giant and the world’s top crude exporter.

The field also has a 2.4 billion standard cubic feet per day (Bscfd) Natural Gas Liquids recovery plant, providing large volumes of ethane, critical for industrial development, as well as other natural gas liquids (NGLs).

Al-Maliki also said on Monday that two ballistic missiles launched toward Prince Sultan Air Base were intercepted and destroyed. The air base hosts Saudi and U.S. military personnel and serves as an important hub for air operations in the region.

The conflict is widening as Iran picked Mojtaba Khamenei, son of the late Ayatollah Ali Khamenei, to be its new supreme leader.

Meanwhile, major Gulf producers, including Iraq, Kuwait, and the United Arab Emirates (UAE), are slashing oil production as they are running out of storage space, while the Strait of Hormuz continues to be de facto blocked for tanker traffic.

Oil broke above $100 per barrel in Asian trade on Monday as market participants began to price in a longer-than-initially-thought disruption to shipping in the region.

“The bottom line is that, as long as we don’t see oil moving through the Strait of Hormuz, oil prices will only move higher,” Warren Patterson,

Head of Commodities Strategy at ING wrote in a note early on Monday.

By Tsvetana Paraskova for Oilprice.com

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