Its size and production capacity makes it a critical part of the global oil supply industry.
It’s not yet clear how much damage was caused to the two plants or for how long production will be impacted, but the Saudi oil minister confirmed overnight a temporary loss of 5.7 million barrels per day of production because of the attacks.
For context, Saudi Arabia pumped 9.8 million barrels per day in August.
The Abqaiq plant was the target of a failed al Qaeda attack in 2006. Since then it has been heavily fortified but is still vulnerable from the air, especially from drones which can bypass air defence systems.
In terms of the impact on the global market and oil supply: well, short term there may be a problem which will become clear when the markets open on Monday morning.
But longer term the gap will probably be bridged by increasing production elsewhere and by releasing reserves into the market.
The much bigger concern now is the geopolitical fallout and the consequence for regional security.
The US government is in no doubt that the Saudi drone attacks were the work of Iran.
The operation was claimed by the Yemeni Houthi rebel group but they are known to get weapons and technology from their main backer, Iran, who are suspected by other nations to use relatively low-tech ‘attack drones’ as weapons.
With cheap new technologies, small attack or ‘kamikaze’ drones are proving to be disproportionately effective when successful.
Two weeks ago, Israel carried out what they said was a preemptive strike on fighters they said were linked to Iran’s elite Quds Force who were preparing to launch a drone from Syria (where Iran now has a strong foothold) to attack Israel.
US Secretary of State Mike Pompeo said Tehran had launched an “unprecedented attack on the world’s oil supply”, adding that there was “no evidence that the drones were launched from Yemen”.
It’s true that, geographically, the two oil refineries are closer to Iran and Iraq (where Iran has a foothold) than to Yemen.
The Americans have always blamed Iran for stoking the flames of the Yemen conflict. But the drone attack represents, in US government eyes, an attack on global energy supply which they’ll interpret as an attack on them.
“We call on all nations to publicly and unequivocally condemn Iran’s attacks,” Mr Pompeo tweeted. “The United States will work with our partners and allies to ensure that energy markets remain well supplied and Iran is held accountable for its aggression.”
In such a chaotic and delicate region, an attack of this type is very dangerous.
Donald Trump has been hoping to meet Iranian President Hassan Rouhani in his latest attempt at rapprochement (after limited success with North Korea’s Kim Jong Un and no success with Afghanistan’s Taliban).
Last week he fired his national security adviser John Bolton who was calling for a much harder line on Iran.
While Mr Bolton sits out of office no doubt saying “I told you so”, President Trump must now be pondering the merits of the proposed meeting with the Iranian president.
His own secretary of state seems clear: “Tehran is behind nearly 100 attacks on Saudi Arabia while Rouhani and Zarif pretend to engage in diplomacy…”
