High will petrol prices go because of the attacks in saudi arabia the Worlds Biggest Oil exporter is scrambling to repair the damage and try to fighters in yemen are vowing more attacks with a threat for severe think of our thirst for saudi oil this is inside story. Hello and welcome to the program. Saudi arabia is trying to reassure the world that it will quickly recover from saturdays attacks on his oil plants of the reassurance fail to stop oil prices soaring 19 percent their highest ever increase in 30 years prices have since is by concerns remain about the 50 percent cart for the worlds biggest crude exporter especially because her fighters in yemen are vowing more attacks to quit his economy you know Satellite Photos of the damage have been released and donald trump war the u. S. Is locked and loaded to respond and ready to release Emergency Oil reserves if needed while iran jackets u. S. Accusations that its involved. Lets have a look at who has the biggest reserves of oil or Member States of the International Energy agency have 90 days of emergency stockpiles in case of crisis the us holds the Worlds Largest to teach it betrayal reserve followed by china japan and south korea almost 80 percent of the worlds Proven Oil Reserves are in opec member countries saudi arabia but as well are and iran top the list. Now over to our panel in amman. And nanny jordans former deputy Prime Minister as well as foreign minister hes also an economist in bern switzerland Cornelia Mayer an economist as well as an oil and gas specialist at the Financial Advisor firm mayer resources in london bill or journalist and i notice on gulf Affairs Welcome to you or mr the nanny of the increase in oil prices which was about 19 percent perhaps the biggest percent to percentage spike in 3 decades is this an indication of a panic. Or a deeper economic crisis here well i think that it is mostly panic because there was no reason for oil prices and the normal circumstances drive increased that fast in one day so it was a complete response to the act. Of the bomb being of the of the facilities well facilities in saudi arabia. And despite all the. Ideas and their pronouncements of president. Trump and as well as the minister of and secretary of energy in the states to come to market and also in saudi arabia is the collaboration that they want to use their reserves but people still panicked because they dont know how much time it would take the saudis to repair those facilities and how much to what would happen to their actual usage of reserves if not started to preserve so they are in a way if there is complex there is a complete absence of specific information or is speculative. So is it mostly because of the absence of further information from the saudi government. And that it was saying about the scope of the of the damage the whether saudi arabia will be able to get its act together with output in a time so that is creating the panic that were seeing across the Global Markets. I think its 2 things its 1st of all markets always overshoot they always overshoot and to undershoot and then people didnt do the numbers when you look at how many reserves we have and yet also how many strategic how many reserves saudi aramco have saudi aramco can between 30 and 45 days of saudi production they have reserves across the globe so people werent really doing the numbers and i think now what would be really important is how fast can call you know get the. Processing plant back up and lets martin it not speak clear prosecco Processing Plants are not like like switches it will take time to get it up so we have information need and then we need to differentiate there is steet current shortfall because of the of the of the attacks and then there is also suddenly analysts realized oh there is a risk premium and geopolitical risk premium that had been all but gone so in that sense we have to see how that will pan out but in the end oil markets still you know up until saturday everybody said oh were so over supplied and once one steel plant is out to get up and running again were still basically oversupplied bill reconsider the risk premium for future deals is this something that is just related to this particular incident of the things is something which is going to be taken into account for a longer term. I think that the response to her is not simply related to this particular incident as severe as it is the risk factor will will build in the fact that the saudis shown themselves incapable of protecting their most crucial and valuable asset and after all this attack hit the heart of the saudi aramco it was a pinpoint attack it was very destructive we dont know how long its going to take to get that facility up to speed again and and as your other commentators have noted that is a huge question because the longer it takes the more damaging it will be to the saudis and most particularly to the saudi economy so theres a lot of a reason for people to be concerned and i would think that the appetite for example for the around go i. P. O. Will be weaning somewhat certainly on the International Front because of this attack. The hostess said that the flu 10 jones to can last this daring attack of the heart of saudi arabia do you think of this is something that could potentially change the dynamics to have shaped Global Energy markets well until we come to grips with the fact that the horses it was the horses who did it probably there may have technically and logistically helped by other forces of all the outside forces like iran but still that means that we are you know have turned the page and this is a new phase in the war so in a way the question remains in as far as future tensions are concerned whether the saudis and their allies would retaliate in order to distort the what the court might call a deterrence balance or all of they might. If they dont do that then they feel that they have a go shifting position has been weakened so in a way while they are worried about. Further retaliation by the hole with is. Aiming at their Oil Facilities which would aggravate the situation saudi arabia i think that because of the surgical procedure which the 1st of the last one the friday morning raid was carried i think that now we have a new dimensions to contend with and i believe that of the saudis will retaliate eventually and that may invite further retaliations or counter rivero to televisions from the horses and there if that continues without an interference and trying to bring that to all parties to the table to sit down and discuss then we may be in for a big and the along. With the fact that the war that only god knows how it will end clearly its either the same. Others have been concerned treating their Processing Plants in one particular area and this explains why after the attack almost a half of their output has been severed do you think this is something that will take the saudis were weeks and weeks in the future to be able to contain well who did this thing is it is in one in one part because the Largest Oil Field you know its in the Eastern Province where the oil is so obviously the biggest Processing Plant is where the oil is so in that sense but i think weve responded to the former Prime Minister i totally agree with him and one of the things we need to look at this also what lessons has sowed the defense apparatus learned because clearly saudis to 3rd largest procurer of. Weaponry of arms so in that sense you know day to day well need to proof that they will really look at their at that that they can its not that theyre not just going off to after airplanes but also off the drone so day will need to prove that they have to they have to equipment they have will have to prove that they know very well how to use that equipment bill will it when you look at the this particular case which is the attack targeting the oil fields in saudi arabia i think its exposer underscores in a way or another the vulnerability of the Oil Production facilities in the middle is this something of the should be taken into consideration by key players in the future. Oh yes i think so to do it he usually underscores the vulnerability and youll recall that the who they said previously hit the Oil Pipelines doing really minor damage this this particular hit as i said straining at the heart of saudi aramco will send shock waves i think throughout the middle east of whom most particularly in saudi arabia because after all its not just the infrastructure of saudi aramco that is potentially vulnerable it is also. Desalination plants that could potentially be civilian targets really this this new technology that either the who these or those who are assisting the who these are suggestions these attacks may have come from iraq from the us to xabi the shia militias in retaliation for an Israeli Attack in august that that that this kind of situation can can rapidly escalate and and i think as as as the former Prime Minister said it could lead to something that could be potentially a war of enormous and really quite. Horrible consequences so what were seeing now analysts talking about and and governments also raising the issue of tapping into strategic struck by is to be able to mitigate the risks and also stop in a further spike in oil prices is this one i agree with that i just go is this because of the confusion which has been spreading all over the world about whats happening as i was arabia. No i think you know or at the beginning i agree with with with cornelia that at the beginning you know there were there was completely people will believe yes theres a detailed information of 1st of all you know saudi arabia itself is a Large Consumer of Oil Production saudi arabia right now is producing 10000000. 00 barrels roughly of which 4000000. 00 they use at all so in a way their capacity to export is about 6000000 barrels a day if they lose 5. 7 that means that does not leave them with much oil to export so in a way the saudis need to do something that will impact their budget and also impact their g. D. P. Growth and their Diversification Program on the other hand i think that if they do offer for 4 for a television in order to change the whole thing is not to repeat the same experience without severe consequences then they have to do it to hit back and mostly that will be many civilian casualties such casualties will cause a great deal of of panic but the word like a leader like. Said has yes has for about 4100000000 barrels of reserves these are these are the statistics from the International Energy. Agency the i. A. E. A. And accordingly and the United States has 727000000. 00 barrels which belong which are for the government in saudi arabia their reserves are about bit of a range between 180000000 to 200000000 those are distributed all over the world but also consumer can Large Consumer countries have all of their own business but they dont like to see their origin to drop to critical limits so they eventually they may use probably 40. Percent or 50 percent of them but then if they think that this war is going to rock they will have to start by oga need new sources of supply and we cannot rely on reserves and on so. For this particular reason why are we southerly particular over the last 24 hours in all these talk about the need to tap into Emergency Oil inventor is to maintain stability. Well i think part of it is you know donald trump is not a detail man right so he did probably didnt do quite the numbers before that so before he made his point his is point and it is part of you know we want to calm the markets people want to calm the markets because you saw at the beginning off today it was 20 percent up the oil price now its about between 8 and 9 percent up so it came down considerably so so this is may need to come to markets and to say look theres enough theres enough oil there bad them as as both women said its really the issue is where from here and this is not just saudi arabia it is also do you a you know the u. A. E. Is also in that coalition against the who with this and then the u. A. E. I mean you know they have also Processing Plants so so the whole region it did g. C. C. Its always been that that island of stability in that sea of unrest and strife that is the middle east so this brings this brings to cheese sisi and especially saudi arabia one step closer to the ramifications of that strife and it will be very important i think for everybody that cooler heads prevail because if we have too much tit for tat then he can really get out of control bill if you look at the map of the region you have 2 hot spots here you have war in yemen and then we saw the aftermath of the war basically attacks targeting Oil Facilities in saudi arabia but at the same time you have the showdown between the iranians and the american over the straits of homeowners potentially were talking about what could potentially become a huge crisis in the world if southerly you have a disruption in the strait of hormuz and then you have a disruption in saudi arabia. Yes and we shouldnt forget also that iraq the the war in iraq against isis to die is not over and in fact that remains a threat iraq is still a very fragile in a very fragile situation and youre right i mean there are a couple of things that could go simply wrong that could lead to a major confrontation thats the concern and and it is important that everyone step back and calm down i mean its interesting dont truck has taken a lot of flak from american commentators because of the that tweet in which he said im waiting to hear from the saudis before i decide what to do why is it as some wags of said why is the Saudi Crown Prince dictating American Foreign policy and whether were whether or not we go to war but the fact is that i have to say that that probably is a sensible thing to say because the last thing that we need now is any further escalation of the rain ians are playing a very clever game here theyre pushing and pushing will they have the sense to draw back i dont think they will but if the americans for example did hit this did hit iran that would take this thing in a whole new orbit and a very dangerous orbit so i think we do need to have this locus paused and the fact is that oprah says did drop quite dramatically as when he said that they when they started 20 percent theyre now down below 10 percent so there is that calming factor at play you want to what does this crisis mean full big importers china india japan and other countries. Well you know it means that they probably would like to diversify their sources of oil in the future and 2nd i think it may. Invite also other issues like using pipelines instead of shipping because shipping in case the war as carriers and continues gets brought directed i think the. Marine shipment of oil might be the 1st victim of such of such a development so therefore the cost of insurance the cost of transportation of oil will become an important factor in determining how far prices could go so in a way i look at the future and i say that probably they may look for other sources and they may also resort to constructing long. Pipelines the 2nd issue is that you know vulnerability of china and india and particular because each imports about 10000000. 00 barrels of Oil Every Day and they constitute about 20 percent of total world demand so in a way that that that is a very important thing for them to take into account as busy an interruption of oil would mean that their Economic Growth will be even even squeezed further so i believe that you know here if saudi arabia must be extremely careful about maintaining the same supplies and having the same contracts with both countries japan and south korea as well in order to guarantee that those clients would not seek other alternatives and would continue to deal with saudi arabia korea we would be talking about the geopolitical implications or implications of the crisis but then lets talk a little bit about the impact of this crisis average people of of the world because usually spike it all. Weisss are more about people having to pay more at gas bombs decline in spending and decline in Economic Growth is this something that is going to take some time or is just going to be a shorter term impact of the crisis that we see in. Well is it its a shorter term an impact am off to crisis and for high hallways notice istead way never do your old price goes up it seem mediately past super tootie to to took the consumer however when the co stone its not that immediately passthrough to the consumer which is so which is sir which is how if you im a mild every if you End International oil company you make your money apart a few money berti did the seeing it do to to really p. Be clear here yes it will pass through and we will have to see where we go but lets not forget the back drop up until friday night last week we were all worried about oversupply end ever fording oil price is tell pick and its 10. 00 allied to nations opaque plas took 1200000. 00 barrels out of to system we thought we needed to to in in in december when day meet again take out another 1000000000 barrel or 500000 barrels so in that sense lets look go against the backdrop b. S. There is a spike it has come down but we really need to look a little bit a how quickly how quickly it is facility comes up again you know how saudi arabia as sabre to a swash the the the analyst sent the Global Markets and lets give it 2 weeks to see really a how much did to consumers going to be hate that the pump ok bill sunday arabia has been using our own core for almost 60 or 70 years to for its political and Financial Leverage world white nol people are saying the vis minnow longer be the case because even if the go for the initial offering Public Offering for our im co theres absolutely no way of the going to get and the closer to 1. 4 trillion dollars there were hoping to achieve does saudi arabia how to redefine is for us is he in the near future given the strings of our taxi has phase over the last 2 ones well i think this is represents a huge setback for mom dad some on the crown prince as you say he wanted to do this i. P. O. This sale of shares of saudi aramco initially it announced it was going to happen in 2019 it was postponed why because buyers are saying well if youre going to sell youve got to be transparent youve got to tell us open up the books and show us where the money is going well of course thats something the world family the ruling family the house is sowed does not want to do because a big chunk of that money goes directly into their pockets and there are many many pockets to be lined the saudis have reshuffled for example they replace the Energy Minister a highly respected minister and of and have put in brother half brother mama been solomonic to to run it to run the district down situation around go they put someone else in charge as a chairman of around cause a big shift going on just at the point that this attack hits and and as i said investors are looking at this and thinking well you know is this really a safe bet because there is a huge risk factor here and and whos to say that the saudis showing themselves really incapable of that of preventing such a terrific terrific and powerful attack whos to say another one couldnt happen again so we have lots of questions that our lives are non is facing he needs this money from the the i. P. O. I dont think hes going to get it and as i say the longer this thing stretches out the more damaging it is to him the more damaging the saudi economy the less hes able to fulfill some of his dreams of altering the way in which that economy functions. For sure through how to leave it there because were running to me just say one think please very briefly if you dont mind me just say one thing please. Very briefly very briefly dick did new oil minister prince scepter lessees he may be a half brother had but he has for the last 30 years been a fixture in the oil ministry and in iran course one of the most highly respected people in pick so i ate it he didnt just put. Aside and took some nobody in there that guy really is speed if he is to go to a large part mr oil in saudi arabia absolutely no doubt they were talking about extraordinary times delicate choices facing the saudi government in the near future canaria manzo wilder and any below thank you very much indeed for your contribution to the program and thank you too for watching you can see the program again any time by visiting our website as you know dot com for further discussion go to our Facebook Page thats facebook dot com forward slash a. J. Inside story you can also join the conversation on twitter our handle is a. J. And so i started from the house about what are the hot in here by phone and. World leaders from un Member States are preparing to take their seats for this years general assembly. Horney and President Trump will attend can growing tensions between the u. S. And iran be used will multilateral efforts provide solutions to a global refugee crisis escalating wars and Climate Change before its too late join us for extensive coverage of the Un General Assembly on aljazeera there is a huge group of people at work behind our screen and the power they have is massive that urge to keep swiping through your twitter feed thats just not the way we all click i agree to the terms and conditions thats a sign to most of us never even give it a 2nd thought and actually thats designed as well ali riggs explores how designers are manipulated county havior and the final episode all hail the algorithm on a jersey and. Leaks stories generate thousands of headlines it seems that much the media is still struggling with how to deal with it with different angles from different perspectives and you hold to separate the spin from the facts. The misinformation from the journalism how careful must be your words but some tough stuff has to be said to some critics have to be the listening post on aljazeera. While the u. S. Planes around the impact of an attack on a Saudi Oil Refinery is being felt around the world. Alone down to this is out there a live from also coming up voters in israel are deciding whether Prime MinisterBenjamin Netanyahu will stay on or if his rival will unseat him. In the knees of battles illegally lit fires burning through its forests and spreading thick smoke across Southeast Asia plus. France orders the closure of a migrant camp housing hundreds of the refugees overstay the deadline to leave. President donald trump says it looks like iran was behind saturdays drone attacks which crippled more than a half of saudi arabias Oil Production but he says hell wait to see definitive proof before deciding how to respond trump said secretary of state might pompei o would be traveling to riyadh at some point to coordinate the Response Saudi Arabia says the attacks were carried out using iranian weapons but tehran denies it yemens who the rebels say they were behind the attacks and that warning more strikes are coming well the full picture of the damage is not yet clear but chinese officials have been told that its Oil Deliveries will be delayed and there are reports saudi arabia is trying to buy diesel for urgent delivery capitalism begins our coverage now from washington d. C. President donald trump says the u. S. Is still collecting and analyzing intelligence related to saturdays attack on saudi Oil Facilities but says all evidence gathered