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Jefferies skeptical Yemen rebels responsible for attack on Saudi oil

By Alexander Bueso

Date: Monday 16 Sep 2019

Jefferies skeptical Yemen rebels responsible for attack on Saudi oil

(Sharecast News) - Analysts at Jefferies sounded a skeptical note on Yemeni Houthi Rebels' claim of responsibility for the drone attack at the weekend against key Saudi oil installations.

"This frankly seems a bit far fetched given the distance from Yemen to the Eastern Province of Saudi Arabia and the extent of the damage," they said.

According to analyst Jason Gammel, and despite the US Department of State's attribution of the attack to Iran, cruise missiles seemed a likelier explanation for an attack "of such magnitude".

"If the Iranians have been driven to desperate measures from the loss of crude export revenues, an attack on Saudi capacity seems a likely response," Gammel added.

In the analyst's opinion, the possibility of a wider conflict, including a response by Saudi or the US, "will likely raise the political risk premium on crude prices by $5-10/bb."

"In a worst case scenario that resulted in a shutdown of oil transport through the Straits of Hormuz, oil prices could push through $100/bbl. We think this outcome is highly unlikely however, not least because important Iranian allies like the Chinese would be hit hard."

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