May 30, 2004

Attack in Saudi

Given today's terror attack in Saudi Arabia this excellent Economist article which analyzes nightmare scenarios--vis-a-vis major terror attacks on oil production facilities in the Kingdom--is particularly timely.

This last attack will likely merely have a relatively slight impact on oil futures mostly born of psychological factors--as oil supplies themselves don't look to be disrupted (and further OPEC output increases look to be coming on tap).

But clearly, this was a pretty well coordinated (and bold) attack that showcases, just in case we needed a reminder, that Saudi Arabia is facing critical challenges on the security front that are likely to get worse before they get better.