The Hindu : International : Saudi attack sparks fears of oil crisis

Online edition of India's National Newspaper
Monday, May 31, 2004

International

International

Saudi attack sparks fears of oil crisis

By Nick Mathiason and Mark Townsend

LONDON, MAY 30. Oil prices are set to surge after Al-Qaeda gunmen killed 16 people, including a Briton and an American, yesterday during an indiscriminate rampage through the Saudi Arabian city of Khobar.

In a day that left the oil city littered with bodies and bullet-riddled buildings and cars, the terrorists attacked four compounds housing foreign workers, seized hostages and fought running battles through the streets.

The attack sent shockwaves throughout a western world already facing high oil prices and the prospect of worsening violence in a kingdom riven between its ruling royal family and jihadist groups determined to bring it down.

As Saudi security officials surveyed the horror — the latest outbreak of extreme Islamist violence to harm the crucial oil industry — energy experts warned of the potential for a global fuel crisis triggered by instability in the country holding the world's largest oil reserves.

In one of the most audacious terrorist attacks in Saudi Arabia so far, extremists stormed the luxurious housing compounds for oil workers, including the Oasis, which suffered the worst of the violence.

Among the dead was a 10-year-old boy caught in the crossfire as he travelled on a school bus. Witnesses described pools of blood in hotel lobbies and bullet-riddled cars as foreigners tried to flee their attackers.

Security sources said the militants tied the body of the Briton, an employee of oil firm Apicorp, to a car and dragged it 2 km before dumping it near a bridge.

Within hours of reports that Al-Qaeda gunmen were engaged in fierce fighting after being surrounded by hundreds of Saudi police, oil analysts in London and Washington warned of severe repercussions. Economists called the attack their worst nightmare come true.

It could send oil prices to record highs above $42 for a 25-gallon barrel. The rise would renew fears of a world energy crisis not seen since the early 1970s Prices have already risen amid fears Saudi Arabia would be unable to defend its oil industry from terrorists.

Repeated attacks could push oil prices above the economically devastating $50 a barrel, warn City experts.

The attack came only days after a senior Saudi Al-Qaeda leader, Abdulaziz al-Muqrin, unveiled a plan for an urban guerrilla war in the kingdom.

Saudi security sources have admitted the destabilising influence of neighbouring Iraq, complaining of a steady traffic across the long shared border in arms and other material to terrorist groups.

By yesterday morning Al-Muqrin's orders had already been put into practice. Four gunmen in military-style dress stormed Oasis where employees working for Shell, Honeywell and General Electric are understood to live. —

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