The Intelligence from The Economist Pipe down: attacks on Saudi oil
Sep 16, 2019
Shashank Joshi, Defense editor for The Economist, and Vijay Vithyswaran, U.S. business editor, dive into the recent missile strikes on Saudi oil facilities, unveiling their implications for geopolitical tensions and the proxy conflict with Iran. They discuss how this event threatens Saudi Aramco's IPO amid rising investor concerns. The conversation also touches on WeWork's tumultuous journey towards its own IPO, facing valuation drops and governance doubts, while examining the broader social impact of Brexit on British Jews seeking EU citizenship.
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Potential for Escalation
- Diplomacy between the US and Iran is now less likely due to the attack.
- There's a risk of military escalation by either Saudi Arabia or the US if Iran's involvement is confirmed.
Impact on Oil Markets
- The attack significantly impacted Saudi Arabia's oil production, causing a surge in global oil prices.
- Repairs are expected to take weeks, prolonging the impact on the market.
Aramco IPO Concerns
- The attack comes at a bad time for Saudi Aramco's planned IPO, raising investor concerns about supply security.
- The attack undermines Saudi Arabia's image as a reliable oil producer and geopolitical player.