​Abqaiq attack reveals vulnerabilities which could reduce conflict risks (conference call summary)

GULF COUNTRIES - Report 25 Sep 2019 by Rory Fyfe and Justin Alexander

Production seems to have been restored to pre-attack levels more quickly than expected. However, we remain sceptical about the pledge to restore full theoretical capacity back to pre-attack levels by the end of November. Was Iran involved? Probably in some capacity, although important question marks remain, such as whether Rouhani himself was aware, and the location the munitions were launched from. There are three main implications of the attacks: 1) The vulnerability of Saudi infrastructure, 2) The urgency of achieving peace in Yemen, and 3) The risk of conflict with Iran may actually have decreased because of the threat of Iranian strikes on oil infrastructure. We estimate that the upper bound for the risk premium embedded in the oil price is $4/ barrel.

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