Attacks in Saudi Arabia: how they impact on the world balance and the Argentine economy

The escalation of tensions in the Persian Gulf and in general in the international oil market is worrying. This weekend, oil facilities were attacked in Saudi Arabia leaving about 5% of the world's oil production out of production, approximately 7.4 million barrels / day. The international oil market is currently surplus and operators expect prices, which today rose about 10% in the coming days to stabilize at values ​​close to those prevailing before the attack.

However, it is another step in the series of incidents that have been recorded since President Trump reestablished the embargo against Iran, in response to the breach, by this country according to US claims, of the nuclear agreement that had been signed during the government of President Obama. A few weeks ago, two tank ships were confiscated by the Revolutionary Guards near the Aden Strait, in retaliation to the same extent that the British authorities adopted with an Iranian ship in Gibraltar, arguing that it was transporting oil to Syria, a country that is seized by the western powers. The United States monitors the movement of Iranian tankers and threatens to apply sanctions to those who do not comply with its provisions.

Climbing occurs in an extremely sensitive region because of its strategic importance for the security of global energy supply and its deepening can involve other countries such as China, Russia, and India, dangerously.

It is also a concern for Argentina, with many economic difficulties and very sensitive to price variations in the international oil market. After the internal elections of August 11, President Macri, rightly, ordered a 90-day freeze on the prices of gasoline, gas oil and other oil derivatives as a result of a devaluation close to 30% of the peso to avoid transfer to prices and the consequent inflationary impacts. The international market price and the exchange rate are the price formators of fuels in our internal market.

The freeze, much criticized by the industry, shows our vulnerability as an importing country, after having lost the self-supply in 2012, and the increases in the international price of oil directly impact the internal prices of fuels. In an economy with extreme fragility like ours, any breeze in the international oil market becomes a hurricane for consumers.

* Vice President of the Argentine Institute of Energy "General Mosconi".

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