Greek Minister of Foreign Affairs Nikos Dendias welcomed his Saudi counterpart Prince Faisal bin Farhan Al-Saud to Athens last week. It’s the second time the two ministers have met in less than a month. According to Dendias, the two countries are working together as two responsible guarantors of regional stability. This is a rather ill-advised statement, considering that the scope of the current Greek diplomacy and foreign policy does not qualify for such a role and simultaneously considering that Riyadh’s international attitude proves that the kingdom is more of a cause of regional tension than it is a responsible power that promotes peace and stability.

The Greek-Saudi Patriot Missile Deal

Besides their aligning interests in the Libyan front, as both countries are supporting Field Marshal Khalifa Haftar and the LNA, the specific reason for the Greek-Saudi meeting and the issue on the top of the agenda was the so-called Patriot deal. A drone attack against Saudi Arabia’s state-owned Saudi Aramco oil processing facilities took place in September 2019. Considering the impact on the main pillar of the Saudi economy—the energy industry—Riyadh sought to enhance air defense capabilities both domestically and through international partnerships. Their priority is to stop potential attacks from the Iran-backed Houthi rebels or any other affiliated groups.

The Greek government responded promptly to the Saudi call and has agreed to provide Patriot Surface to Air missiles (SAMs) from the arsenal of the Hellenic Airforce. At this point, it would be worth looking more into the rationale of the deal, as one might reasonably wonder why the Saudis had to take this missile system from Greece rather than directly from the United States.

Why Does Riyadh Want To Buy Patriot Systems From Athens And Not Washington?

Riyadh has traditionally secured major deals with the US defense industry. Considering the economic wealth and importance of the kingdom, these deals could be interpreted as a significant diplomatic means that ensured the stable and prosper bilateral relations between the two countries and the continuous US support for KSA in terms of defense and security. So, what is the point in having Greece deploying the missiles instead of a direct deal between Riyadh and Washington?

If US-Saudi economic relations can be understood as a foreign policy tool, this is where the latest agreement with Greece also fits in. After the recent visit of the Greek PM to the White House, Athens has been advised to satisfy the Saudi request in order to support the ongoing US confrontation with Iran. The long-lasting dispute between the two major players in the Middle East—Riyadh and Tehran—could stop being perceived as a regional clash through proxy actors in neighboring countries like Yemen and Lebanon, while the participation of an EU country in the air defense system of Saudi Arabia with personnel on the ground boosts the narrative of a multinational anti-Iran force standing up to Iranian aggression. It also sets the ground for other US-affiliated countries to join. But what could be the consequences of such a move for Greece?

Greek-Saudi Deal Is A Dubious Move Amidst Greek-Turkish Escalation

In order to understand the size of the force, the SAM batteries to be deployed to Riyadh account for almost 16 percent of the—probably—most sophisticated Hellenic SAM air defense system available. Combined with the specialized personnel that accompany the system—over 100 servicemen—that will be transferred to Saudi Arabia to support the mission, it is obvious that there is a severe impact on Greek capabilities and readiness, especially when taking into account the current escalation between Ankara and Athens and the continuous Turkish breaches of Hellenic airspace.

Even though the aforementioned numbers have not been confirmed by governmental officials yet, it is highly likely that they are accurate. After a—rather insufficient and unsuitable, as usual—criticism from the opposition parties, sources of the Hellenic Government have tried to downplay the consequences of this agreement, suggesting that a Patriot battery has been inactive until recently so the agreement with Riyadh would make no difference to Greek defense capabilities. Even if this claim is accurate, it is totally unacceptable for the current administration to admit that a critical weapons system has been out of service for an unspecified period of time, and it is equally unreasonable to suggest that when eventually it has been put back into service, it would shortly be shipped to Saudi Arabia in order to support operations irrelevant to the Greek interests. There are some rumors about a technical update from the US on the remaining Patriot systems in Greece on beneficial terms in return for the deal with KSA, but—while possible—those rumors are too generic and still remain unconfirmed.

Two-Fold Impact On Greek-Iranian Relations

At the same time, this move will certainly deteriorate the long-term bilateral relations between Athens and Tehran. Iran has traditionally been an important partner to Greece, with significant commercial and cultural ties having long been established between the two countries. Greek Prime Minister Kyriakos Mitsotakis in a diplomatic blunder was urged to declare support for the US administration after Soleimani’s killing. This move has been heavily criticized, considering that all the other EU leaders have tried to be as neutral as possible in order to contribute to the de-escalation of the tension and not provoke Tehran further; not surprisingly the Greek reaction has pushed Iran to officially lodge a demarche through diplomatic channels. Among others matters, the statement mentioned any facilitation from a third country to US Forces deployed and ordered to operate against the Islamic Republic would be perceived as a hostile act.

Even if the Greek Ministry of Foreign Affairs, alongside the major in-country media outlets, tried to downgrade the incident, indicating that the Greek-Iranian relations remain well-tempered, Athens is now making a controversial deal with one of Tehran’s worst enemies. Criticism within Greece has focused on the impact of this development on the commercial ties between the two countries, with many voices mistakenly suggesting that Iran is still one of the major oil providers for Greece, although there has been a tremendous downturn on Iranian oil imports to Greece since Trump started abandoning JCPOA. Of course, we don’t doubt that Tehran is an important trade partner for Athens and the last moves would have a negative impact, but the most vital and concerning aspect for Greece has been once again internally neglected.

This is the impact on the internal security of the state and the perception of the terrorist threat in Greece. A statement from the Greek PM would hardly trigger a violent reaction from Tehran, however, a substantial engagement of Greek forces on Saudi ground might be a step too far for the Iranian leadership. We have previously discussed how insufficient Greek infrastructure is, in controlling Middle East-originated individuals entering the country; we have also explained the heightened risk ensuing from this situation, from a security perspective, explaining that the perpetrators of some of the most high profile attacks in European metropolitan cities have entered Europe through Greece.

The risk perception could remain manageable as long as Greece is adopting a responsible neutral and balanced stance in the region. But the surprising decision of the Patriot deployment to Saudi Arabia might well provoke an unprecedented Iranian reaction. We have seen several times in the past that the triggering of dormant proxy cells in third countries as a means of Iranian retaliation is a possibility even if Tehran hardly ever takes the credit for such actions—at least officially. Athens should have already secured the appropriate countermeasures before proceeding to such controversial diplomatic maneuvers. At this point, we seriously doubt if any countermeasures were taken.

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Authorization for the attack that killed Iranian Gen. Qassim Suleimani was given by US President Donald Trump seven months ago, according to an NBC News report. The revelation cast more doubt on Trump’s assertion that the drone strike was ordered as a preemptive measure against ‘imminent threats.’ Furthermore, speculation and discussion surrounding the series of events now includes the question of why this information was not cited as a reason for the attack instead of ‘imminent threat,’ which no evidence has supported. 

The Attack was Planned Months Ago

NBC attributed the new information to “five current and former senior administration officials.” Considering the unusually high turnover rate both within the Trump administration and at the Pentagon, an incalculably high number of people could have been privy to such knowledge. 

Military designs drawn up to eliminate Suleimani were not exclusive to Trump. Israel and two previous US administrations had all identified the Iranian commander as a potential target. Therefore, he was already very much on the radar as an option to strike the heart of the enemy. However, that option was highest on the tiered menu presented to Trump.

As soon as the strike was carried out and the assassination was confirmed, Trump and White House officials were thrust into a never-ending news cycle that demanded answers. The rationale for the killing changed depending on the day as Trump, Secretary of State Mike Pompeo, and Secretary of Defence Mark Esper cycled through a litany of responses. None of them mentioned that Trump authorized the attack in June.

Tehran Crossed Trump’s Red Line

The same month that plans were devised, Pompeo and former National Security Advisor John Bolton were ramping up the ‘maximum pressure’ campaign against Tehran. Part of that entailed warning the Iranian government of a US response should its regime attack US personnel in the region. Previously, Iran had attacked oil tankers and Saudi Aramco oil factories in a series of attacks that seemed to escalate in severity. 

It was certainly reasonable to conclude that an attack on either “US citizens, US assets, or US military,” could be next, and US Gen. Paul Selva, the vice chairmen of the Joint Chiefs of Staff, was among the people warning Tehran. 

“The Iranians believe that we won’t respond, and that’s why we’ve been very clear in our message,” Selva said. 

That message was Trump’s red line – any direct attack against the US would result in a counterattack. He even traveled to Baghdad to personally relay the message and underscore its seriousness. 

Trump’s red line and the consequence of Iran crossing it was possibly an attempt do the opposite of his predecessor, Barack Obama. On Aug. 12, 2012, he warned Syrian President Bashar al-Assad that the use of chemical weapons would result in a US military intervention. Assad went on to use them and Obama blinked, opting not to respond militarily. 

At every turn, Trump has tried to be the exact opposite of Obama, almost as if he asks himself “What would Obama do?” when making key decisions, and then doing the exact opposite. In the case of Suleimani, a target Obama had in his scope, but chose not to attack, Trump saw the opportunity to, in his mind, correct a mistake. Moreover, Trump has always portrayed himself as a strong man and when the Iranians crossed his red line, he saw it as a chance to keep his word, unlike Obama. 

Why did Trump Lie?

That still fails to adequately explain why Trump did not publicly explain this as a reason for killing Suleimani. Instead of citing unspecified ‘imminent threats,’ his case would have endured less scrutiny had he presented it in its entirety. Perhaps he believed a defense rationale would resonate more with the electorate ahead of the election. If American voters believe their president is protecting them from terrorist attacks, they might be more likely to vote for Trump. 

Another possibility is that he wanted to avoid the finer nuances behind the push for the red line in June 2019. Pompeo, Selva, and Bolton all held sway in those discussions that put a plan on the table to kill the Iranian general. Bolton was fired after he and Trump locked horns, and Trump himself criticized Bolton for wanting to start a war with Tehran. Maybe the American president would rather forget those discussions and portray himself as the one making the decision. He becomes the strong man in a story where he chose to kill Suleimani based on a range of options instead of one where he was talked into it by his advisors.

A final possibility, and the most likely, is that Trump and his administration are simply so accustomed to lying that it as in their nature to skew the reasoning behind the drone strike. Since Trump was inaugurated, he has been on the record lying on a number of topics, even the weather at his inauguration and the size of the crowd. It is not difficult to believe he could be conveying a false account of Suleimani’s assassination simply because it is in his nature to do so.

L'articolo Attack on Suleimani Planned in June for Crossing Red Line proviene da InsideOver.

UN Secretary-General Antonio Guterres stated that world body could not verify that drones and missiles used to attack Saudi’s oil fields last September were from Iran, debunking the US intelligence assessment and Reuters investigation saying that Iran had planned the assault.

The US, European nations, and Saudi blamed Iran for the September 14 incident despite providing no supporting evidence. Tehran denied the alleged involvement in the raid, and Houthi rebels in Yemen claimed responsibility for the attack.

Guterres described the UN examined drones and missiles’ debris used in the Saudi oil facility in Afif in May, in the Abha international airport in June and August, and Saudi Aramco’s oil facilities in Abqaiq and Khurais in mid-September.

“At this time, it is unable to independently corroborate that the cruise missiles and unmanned aerial vehicles used in these attacks are of Iranian origin,” the Portuguese diplomat said in a statement as Reuters reported.

The UN report also added that there was no evidence that the Iran-backed Houthi rebels had types of drones utilized in the aggression in the Aramco refineries.

Previously, Reuters investigation revealed that Iran had planned the Aramco attack in May, approved by Iranian spiritual leader Ayatollah Ali Khamenei under strict conditions: the raid did not target civilians or Americans.

However, Reuters could not verify and confirm its version of incidents with the Iranian leadership. Tehran maintained its innocent, and a Revolutionary Guards spokesman refused to give any comments.

What happened on September 14?

On September 14, drone attacks Saudi’s oil facilities in Abqaiq and Khurais, in the eastern part of the kingdom. Both oil fields are the largest oil fields controlled by Saudi oil giant Saudi Aramco.

Washington accused Iran of masterminding the attack despite the Iran-backed Houthi rebels in Yemen’s responsibility for the incident. US President Donald Trump tweeted that there were several reasons to believe who the mastermind of the attack was (without mentioning Iran), adding that Washington was ready for war while waiting for Riyadh’s confirmation.

[We] are locked and loaded depending on verification, but are waiting to hear from the Kingdom [of Saudi Arabia] as to who they believe was the cause of this attack and under what terms we would proceed!,” tweeted the POTUS.

Saudi Arabia oil supply was attacked. There is reason to believe that we know the culprit, are locked and loaded depending on verification, but are waiting to hear from the Kingdom as to who they believe was the cause of this attack, and under what terms we would proceed!

— Donald J. Trump (@realDonaldTrump) September 15, 2019

Three days after the attack, Saudi held a press conference aimed at presenting evidence of Iran’s involvement in the attack.

“Data recovered from the computers [on the UAV] shows it’s Iranian,” Defence Ministry spokesman Col Turki al-Malki as BBC quoted. However, he added that his side was still working the find out where the launch point was.

Iran snubbed the US and Saudi’s claim that Tehran was the mastermind of the assault.

The Americans adopted the ‘maximum pressure’ policy against Iran, which, due to its failure, is leaning towards ‘maximum lies,'” Iranian Foreign Ministry spokesman Abbas Mousavi said.

The attack on Aramco refineries disrupted 5.7 million barrels per day of crude oil, said Saudi’s Energy Minister Prince Abdulaziz bin Salman. Also, the assault has intensified the US-Iran tension following Washington’s withdrawal from the Iran nuclear deal or the JCPOA (Joint Comprehensive Plan of Actions).

Military experts were unsure of Iran’s role in the attack

Washington’s claim was based on intelligence images of the incident. However, military experts could not verify whether the drones were from Iran after examining those images.

Ret. Col. Cedric Leighton, an intelligence expert, specializing in imagery, told CNN that those images did not confirm anything as they did not show the exact location of the launch.

“This is the handiwork of a sophisticated (most likely State) actor. The precise nature of the intelligence used to conduct targeting, the mission planning that went into this to avoid radar detection, as well as the selection of the targets, shows a robust capability that would most likely be the work of a government or government-sponsored group, Leighton explained, adding that the drone are most likely either in Iran and Southern Iraq.

Ret.Gen Mark Hertling echoed the statement, saying that those portraits did not mean anything, adding “other than pretty good accuracy on the strike of the oil tanks”.

Any problems with Saudi’s defence?

Saudi Arabia is the world’s largest arms buyer, mostly from the US, therefore, some questions linger; if the attacks were from Iran, how could the sophisticated US radar system not detect two dozen missiles from Iran?

“It’s very hard to imagine a salvo of 17 shots from Iranian territory not being picked up via some land and sea radars,” a former US Navy with an extensive Middle East experience told Business Insider.

If the claim (that Iran was the culprit) were valid, it would humiliate Washington, given the fact that the U.S-backed sanctions have hit Iran after the U.S accused Iran of developing nuclear weapons.

Iran-aligned Houthi rebels, who are fighting the Saudi-led coalition in the Yemen war, claimed to be the attacker of the Saudi Aramco oil fields. Regardless of whoever launched the drones, the UN report shows that the mastermind of the attack is still debatable, and the conflicts in the Middle East show no signs of abating.

L'articolo UN Cannot Verify Iran’s Weapons Attacked Saudi Aramco’s Oil Fields proviene da InsideOver.

Speculation is rife on the course the showdown between Saudi Arabia and Iran will take in the coming days. This is especially so after media reports emerged to allege the presence of links between Iran and the attacks on oil processing facilities in eastern Saudi Arabia in September this year.

According to the reports, Iran started preparing for the attacks four months earlier in its bid to punish the US for pulling out of the 2015 nuclear deal between Iran, on one hand, and world powers, on the other. Over five meetings, Iranian military commanders debated a list of targets, including US military bases in the Gulf, seaports in Saudi Arabia and Saudi oil installations, the reports said. Iran at the end opted for the oil installations and these were the state-owned Aramco oil processing facilities in eastern Saudi Arabia.

By picking these facilities as targets, Iran wanted to avoid a direct military confrontation with the US. It also wanted to avoid the possibility of a devastating American military reprisal in case American targets were at the heart of the attacks. Eighteen drones were used in staging the attacks on the Aramco processing plants on September 14. Three low-flying missiles were also used in inflicting damage on the facility. They temporarily brought Saudi Arabia’s oil production down to the half and caused world oil supply to drop by 5%. This caused a surge in world crude prices. Even before media reports in this regard, Saudi Arabia pointed accusing fingers at Tehran.

On November 23, Saudi Minister of State for Foreign Affairs, Adel al-Jubeir, said Iran was responsible for the attacks on the Aramco oil installations in September. Speaking at the Manama Dialogue in Bahrain, Jubeir added that his country had asked the United Nations to send experts to investigate the issue. “We asked friendly states and the United Nations to send experts to investigate the attacks,” Jubeir said. “The results will be unveiled soon.” He said the drones and missiles that attacked the installations were manufactured in Iran and that the missiles and the drones arrived from the northern side of Saudi Arabia, not its southern side.

“This is why we hold Iran responsible for the attacks,” Jubeir said. “We expect the international community to take steps to bring Iran to account. We said repeatedly that we do not want war, but the Iranians cannot be allowed to evade being questioned for their wrongdoing.” The Iran-backed Houthi militia of Yemen claimed responsibility for the attacks in their bid to absolve the Iranians from international blame and probably punishment. Nevertheless, the US and Saudi Arabia rejected this claim of responsibility. The sophistication of the attacks, they said, pointed to Iranian involvement.

True, Iran wanted to take revenge on the US for pulling out of the 2015 nuclear deal and imposing sanctions on it by striking at a close ally. vNevertheless, the attacks on the Aramco oil installations were the latest development in a long ideological conflict between Saudi Arabia and Iran, one where religion comes at the center. Iran has been throwing its full weight behind Shiite regimes, forces, and groups in the region since its 1979 Islamic Revolution.

In a way, this destabilizes some Arab states with sizeable Shiite populations and tightens the noose around majority Sunni states, including Saudi Arabia and most of the Arab Gulf. The two countries have spent tens of billions of dollars in the past nine years in backing rival political forces; militias; governments, and organizations. They are involved in proxy wars in Syria and Yemen. They move the strings in Iraq and Lebanon.

Nobody knows for sure what Saudi Arabia will do in the coming days to make Iran pay for its alleged attacks on the Aramco oil processing facilities. Riyadh is now apparently consulting with its allies, especially the United Arab Emirates, where Saudi Crown Prince Mohamed bin Salman arrived on November 27, on the most appropriate action. The coming few days will show what it will do.

L'articolo Uncertain Future For Saudi Arabia-Iran Showdown proviene da InsideOver.

Western intelligence sources revealed that Qatar had been informed in advance of Iran’s alleged attack on Saudi Arabia’s oil facility, aimed at disrupting Saudi’s oil giant Saudi Aramco’s plan to list its shares (initial public offering/IPO). Qatar did not alert its Western allies about the attack.

Besides the 14 September drone attack on Saudi Aramco’s facility, the leaked report, as Fox News wrote, claimed that Qatar had been aware of the May attacks targeting Saudi Arabian oil tankers, two Norwegian vessels, and the United Arab Emirate (UAE) ship at the Strait of Hormuz thus raising concern that the Gulf state’s silence could ruin ties with other countries in the Middle East.

“Credible intelligence reports indicate that the IRGC’s Quds Force is responsible for the attacks near Fujairah and that elements of the Iranian government, as well as the State of Qatar, were aware of the IRGC’s activities,” Fox News stated in its report as The Arab Weekly quoted.

Washington accused Iran of masterminding the attack. Yemen’s Houthi rebels claimed responsibility for the Aramco blast. The incident cut Saudi’s oil output in half.

Later, an investigative report from Reuters revealed that unidentified Iranian officials confirmed Tehran’s involvement in the attack.

Washington and Tehran have been involved in the prolonged conflict following the former’s withdrawal from the Iran nuclear deal (JCPOA/Joint Comprehensive Plan of Action) signed in 2015. The US blamed Iran for violating the agreement despite the compliance report from the world’s nuclear energy watchdog, IAEA (International Atomic Energy Agency).

Reactions: Qatar denies the report, the West is raising a concern

Qatar snubbed the allegations that it had prior knowledge to those incidents, as Oilprice reported. Doha has yet to issue an official response so far.

The US intelligence source refused to comment. However, a French senator Nathalie Goulet and a British parliament member told Fox News that the report was “very alarming.”

“If proven correct, this poses serious questions for our alliances in this region,” Ian Paisley, British parliament member, said.

Goulet, one of the respected European figures in counterterrorism effort, confirmed she would send the report to the minister of defense and chief of the security department.

Qatar hosts the largest U.S military base in the MiddleEast. Fox News reported. The wealthy Gulf country is among the world’s largest weapon buyer From the 2009-2013 period and the 2014-2018 period, Qatar’s arms import skyrocketed 225 percent, mainly from the US and Germany, Lobelog reported.

Saudi Arabia and Other Arab Countries are worrying Qatar’s improved ties with Iran

In 2017, Arab countries led by Saudi Arabia, Egypt, and the United Arab Emirates (UAE) imposed a blockade on Qatar, stemmed from Riyadh’s and Abu Dhabi’s accusation that Doha had assisted and sponsored terrorism-related organizations.

Qatar was accused of funding the Ikhwanul Muslimin, closely related to Taliban and Al-Qaeda affiliates, and having a close relationship with Iran. Qatar’s reputable TV station Al-Jazeera was blamed for supporting Iran-backed Houthi rebel in Yemen, where Saudi and Iran are trying to exert their influence.

Qatar has expanded its support for the Houthis in Yemen, evident from backing from Qatar to Yemeni to pull away from the late Yemeni President Ali Abdullah Saleh, who had close ties with these tribes and their leaders.

Such a backing paved the way for Houthis to kill Saleh at the end of 2017. The former president was trying to reduce Iranian influence before his tragic death.

As the impact of the Gulf diplomatic crisis, Qatar was banned from taking land, sea, and air routes from and to several neighboring countries, such as Egypt, Yemen, Saudi Arabia, Bahrain, and the UAE. Besides those five nations, four other countries (Maldives, Mauritania, Libya, and Mauritius) called for the blockade.

Iran came as the guardian angel by providing its access and food aid to Qatar. Both countries’ relationship has got closer since then, which upsets Saudi given Riyadh’s ambition to contain Tehran’s influence in the Middle East, ignoring other Arab countries’ request that Qatar had to sever ties with Iran.

“The state of Qatar expressed its aspirations to strengthen bilateral relations with the Islamic Republic of Iran in all fields,” the Qatari Foreign Ministry statement said as CNN wrote.

David Reaboi, an adviser at the Security Studies Group, think tank, said that the report (that Qatar knew Iran’s plan to attack Saudi Aramco’s refineries in advance) came as no surprise, but still sounded unusual.

“It’s no surprise to see Qatar play both sides, the United States and Iran, but it’s unusual for a state like this to be as ideological as Qatar,” Reaboi told The National.

Will The Soccer Tournament Help To Create Peace In The Gulf?

Saudi Arabia and the UAE have softened their stances by sending their national football teams to Doha to participate in the Arabian Gulf Cup, Business Insider reported.

Saudi Arabian team and officials flew directly to Doha, effectively marking the end of the boycott. Bahrain followed suit while the UAE team and officials chose to take transit to Kuwait before continuing their flight to Qatar.

The Gulf’s soccer diplomacy can be a positive sign to ease the never-ending conflict in the oil-rich region. However, it seems that the tension will not go away soon, given the Abu Dhabi still sticks to the blockade

Dr Kristian Coates Ulrichsen, Gulf analyst, told Business Insider: “The Qatari Prime Minister’s participation at the Mecca Summits in Saudi Arabia at the end of May did not lead to any breakthrough, as some beforehand had hoped it might.” The leadership in Abu Dhabi remains resolutely opposed to any normalization of ties and easing of the blockade.

L'articolo Qatar’s Silence Over Iran’s Attack on Saudi Aramco proviene da InsideOver.

From November 17 to December 4, Saudi Arabia’s oil giant Saudi Aramco will list its shares on the Riyadh stock exchange, making it the world’s biggest initial public offering (IPO). The company set a valuation worth $1.7 trillion, below $2 trillion the kingdom’s prince sought.

Chinese’s e-commerce giant Ali Baba IPO is the globe’s biggest as it garnered $25 billion in the offering in New York in 2014, Reuters reported.

Saudi Aramco’s IPO will be held amid the ongoing tension in the Middle East following the drone attack on Saudi Aramco’s oil facility last September and the global call for the use of renewable energy.

The world’s most profitable firm said it would only release 1.5 per cent of its shares or around three billion shares, priced between 30 riyals and 32 riyals, as Reuters wrote. The oil firm has appointed Goldman Sachs, Citigroup, Morgan Stanley, and JP Morgan as underwriters.

Previously, Saudi postponed the IPO plan

Saudi Aramco has planned to sell its shares to the public since the firm announced the offering proposal in 2016. However, it had to postpone the idea due to some factors, such as the sharp decline in the global oil price. The location of the listing was then still unclear. Saudi Aramco once considered the Wall Street, bourses in Asia (the primary market of Aramco oil), or a local Saudi bourse for the listing location.

Initially, Saudi Aramco was estimated to release five per cent of its shares in two stock markets (two per cent in the Tadawul Saudi, and the remaining three per cent in overseas bourse). However, Saudi Aramco then revised the plan by ruling out an overseas listing.

In mid-September, ten drones attacked two Aramco’s refineries. Saudi Aramco suffered a 5.7 million barrel a day lost due to the incident (which is equal to five per cent of the global oil supply).

Yemen’s Houthi rebels claimed responsibilities for the attack. However, the US accused Iran of masterminding the attack despite providing no supporting evidence.

The drone attack almost forced Saudi Aramco to delay the public offering. The company’s officials were not optimistic that the oil giant would recover its production quickly after the aggression.

“The company continues to engage with the shareholders on IPO readiness activities. The company is ready, and timing will depend on market conditions and be at a time of the shareholders choosing,” Aramco said in a statement as quoted by CNN.

Saudi Aramco contributes to ten per cent of global oil demand, producing more than ten million barrels of crude oil per day, Marketwatch wrote. The company’s net profit in 2018 reached $111 billion, five times bigger than that of Exxon, Apple and Shell combined.

The Risks Saudi Aramco Is Facing

Saudi Aramco’s offering may be the largest in history. However, the offering is not risk-free and there are several factors to consider.

The drone attack last September disrupted 50 per cent of the kingdom’s oil production. The ongoing conflicts in the Middle East have made some investors think twice before buying the company’s shares.

“They are the best assets in the world, but I have no interest in owning Aramco given the security risks,” Ben Cleary, Asia chief executive officer at Tribeca Investment Partners, told SCMP, adding that the tensions in the Gulf show no signs of receding.

Analysts from 16 banks have provided a valuation of Saudi Aramco, ranging from $1.1 trillion to $2.5 trillion, as Saudi’s Prince Mohammed bin Salman expected. However, $1.5 trillion is considered the most realistic value given the previous incident and Saudi Aramco’s recovery following the intrusion.

Transparency and professionalism are also among the main issues before the IPO. There is no specific data about the size of Saudi oil reserves as Saudi Aramco has not handed over the audit of its reserves to an independent review since 1980.

Saudi Aramco’s management team has little experience in running a public company, dealing with investors, and complying with complex regulations and procedures, CNBC wrote.

The demand for cleaner energy to curb the impact of climate change will pose a risk to Saudi Aramco’s business. As many companies are going greener, Saudi Aramco must be able to adapt to the current situation and demand.

Saudi’s Prince Mohammed bin Salman expects the IPO will raise billions of dollars to help the kingdom to curb dependence on oil. Per December 31, 2016, and 2017, the hydrocarbon industry contributed 43 per cent to the country’s GDP.

Saudi is busy developing alternative energy sources. In 2018, the oil-rich nation built a renewable energy facility to generate electricity in the next ten years, including 40 GW of photovoltaic solar power, three GW of concentrated solar power and 16 GW of wind power, Reuters reported.

L'articolo Saudi Aramco’s IPO: Why The Record-Shattering Listing Has Its Risks Too proviene da InsideOver.