Question

Difficulties and risks that Saudi Aramco is encountering in the host market (USA)?

Answer 1

At Saudi Aramco, activities like drilling wells, pumping oil to the surface, and loading the fuel on tankers can all be monitored and managed remotely. Such sophistication, though, may also create openings for attack. “A lot of those movements are run out of a central command center at Saudi Aramco headquarters,” said Phillip Cornell, a fellow at the Atlantic Council, a Washington-based research institution, who previously worked at Aramco as a senior corporate planning adviser.

Mr. Cornell said that Aramco officials suspected Iran was responsible for a cyber attack earlier in this decade and that “there has been a lot of investment to reinforce those cyber security defenses.”

However, analysts say the cyber vulnerabilities remain a major worry. “I think cyber is the really underappreciated risk,” said Helima Croft, an oil analyst at RBC Capital markets, an investment bank.

Cyber attacks, for instance, could play a surprisingly large role in the event of conflict, gumming up the oil system or even causing damage. “Iran has significant cyber capabilities and in the event of a significant US military action against Iran, one could expect that they might deploy these capabilities against the U.S. and its allies,” said John MacWilliams, who was an associate deputy secretary and chief risk officer in the Department of Energy in the Obama administration.

The evidence, so far, is that the market and the oil industry can take some bumps in stride. Oil prices have ticked up slightly this week to $72 a barrel for Brent crude but still remain below the recent high of nearly $75 a barrel in late April.

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