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Inside Look: DuckerFrontier’s response to Saudi oil attacks

DuckerFrontier, September 18, 2019

DuckerFrontier’s global teams rely on scenario-based frameworks to prepare for changing, and often volatile, political and economic environments. Our analysts adapt their views in real-time as events unfold to ensure clients receive the most up-to-date and timely market monitoring insights.

Below is a look at the current event unfolding in Saudi Arabia and how our teams are constantly working for our clients to separate signal from noise.

On Saturday, September 14, various Saudi oil facilities were attacked, shutting down half of the region’s oil production. Last year in DuckerFrontier’s 2019 Events to Watch report, Ryan Connelly, Practice Leader for Global Economics, correctly predicted impending security risks in the region, specifically surrounding a MENA oil supply outage. From the report: “Successful attacks on Saudi oil facilities…[could] cause a significant shortage in oil supply…pushing prices up in a sustained way for at least six months or longer.”

With the events of this weekend, our analysts convened to adjust their view in real-time.

“We expect any short-term impact will be muted here, with high levels of inventory as we head into a weak seasonal demand period of the calendar year…” says Connelly, “…but any price impact we do see will hit Asia Pacific importers disproportionally. Saudi exports to the United States are at record lows, so countries with higher dependence on Saudi imports like India and China can expect to see the largest price disruptions. However, it appears that the attacks will not lead to a sustained period of production shortfalls, meaning that prices should return to their previous levels over the next month or two.”

Director of Middle East & Africa Research, Zeynep Kosereisoglu, brings her regional expertise in her latest commentary:

Attacks on oil facilities will dampen business and consumer confidence within Saudi Arabia. Worries of not only future attacks but also increased tensions involving the US and Iran will weigh on short term spending and investment tendency. Positive effects of higher oil prices will also be limited for the kingdom; the uptick is likely to be temporary and is accompanied by lower export volumes.

Starting from our internal dialogue through our analyst commentary and culminating with our flagship report, “2020 Events to Watch” DuckerFrontier analysts outline the downside and upside scenarios that companies should evaluate and plan for to ensure that their strategic plans are resilient when the unexpected occurs. The 2020 Events to Watch report will be released to FrontierView clients in early Q4, evaluating the global landscape over the next year and what events your business needs to consider when planning for 2020. Ryan Connelly and Director for Global Economics and Scenarios, Antonio Martinez will be discussing their views in an upcoming webinar on Thursday, September 19 at 10:00am and 8:00pm EST. Click here to register.

If you are interested in purchasing our 2020 Events to Watch or MENA 2020 Outlook reports when they are released, let us know by filling out the form below!

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